In an interview exclusively for The Malta Business Weekly, GO CEO NIKHIL PATIL tells TMBW editor Noel Grima his views of the company and its future
The Group saw a 12% increase in profit between 2017 and 2018. How has this result been achieved?
2018 has indeed been a very positive year for GO, both financially and operationally. Our results stem from a concerted effort to grow our customer base in Malta and Cyprus, drive innovation in our product portfolio, invest in technology and our people to grow as a company and of course, strengthen the relationship with customers through robust customer relationship management solutions that really help us understand and serve our customers better. This investment in our business, in our networks and in our people is bearing fruit.
The strong performance delivered by the Group is coming from its core operations, coupled with impressive growth from our data, managed and ICT services through BMIT and Kinetix. Our Cypriot subsidiary, Cablenet too proved to be a key contributor to the overall growth. Today, 19% of Group revenue is derived from Cablenet which this year delivered a revenue growth of 8% and an EBITDA growth of 10.5%. Cablenet in fact continues to deliver double-digit growth in subscribers and soon we will have the same number of broadband customers in Cyprus as we have in Malta.
The Group has said it focused mainly on three areas - adding value to customers' lives; developing a learning organisation and delivering returns to shareholders. Can you explain in more detail how this was achieved?
These three areas, or rather objectives, are what drives our activity on a daily basis and I am really proud of my team as we continue to make great progress on all fronts. We have long recognised that the value we can add to our customers' lives is by connecting them to what matters most to them. This is our sole purpose and this is exactly what we have been doing. We have been listening to our customers, understanding their expectations and consequently have been offering products that best fit their unique lifestyles - because to us, every customer is unique.
Our recently launched Mix and Match with Home Pack product is a prime example of how we are giving our customers the ability to build and maximise their personal bundle at a far more economical price point and therefore providing value that is relative to them.
We are also revamping our TV interface to offer our customers a heightened TV experience, but more on this will come later, as we launch in a couple of weeks. Our product line-up however is not the only avenue where we are adding value to our customers.
Our customers are online, so we want to engage with them online as much as possible. We have therefore embarked on an ambitious digital journey that is going to increase the number of channels through which our customers can interact with us. Capturing all these interactions in a more unified manner will enable us to better understand the needs of our customers to serve them even better. This is why we have engaged SalesForce to manage all our customer interactions going forward.
Salesforce is the number one provider of Customer Relationship Management solutions in the world. But this is only the beginning of a multi-year, multi-euro project that will strengthen our digital infrastructure. We are always putting the customer at the centre of everything we do and every decision we take. All these initiatives ensure long-term sustainability which ultimately, enables us to create more opportunities to provide greater returns to our shareholders.
Other opportunities to generate greater returns for shareholders also come from our ambitious investment plan. Our investment in companies like Cablenet in Cyprus, in BMIT and Kinetix and activities such as the highly successful IPO of BMIT have also contributed to increased dividends over the years to our esteemed shareholders. In fact, GO has distributed close to €131m to its shareholders over the past five years.
Whether it's launching new products, rolling out new technologies or planning our next investment, we use every single one of these processes, to learn and grow as an organisation. We embrace and encourage the culture of feedback and failure. I strongly encourage my colleagues to try out new things and if they fail, that's quite OK. It's on to the next thing as long as we continue learning and growing from the experience.
Can you please explain in more detail about the Cyprus subsidiary and its results?
We acquired majority shareholding in Cablenet back in 2014. Cablenet is today firmly established as the only independent alternative operator offering triple-play packages which include broadband internet access, fixed telephony and digital HD TV services and serves close to 65,000 subscribers through its wholly-owned cable infrastructure.
In the past year alone, Cablenet has grown its customer base by 6.4%, by offering some of the highest broadband speed products at competitive prices. Revenue grew by 8%. We expect this performance to continue over the coming years. This investment has provided an excellent opportunity for us to maximise on and exchange expertise between the two companies.
In the past few weeks alone, we have worked towards the acquisition of spectrum to start offering mobile services and am pleased to announce that we were successful in this regard. This means that we are now in a position to offer a full range of communications services also in Cyprus. This has undoubtedly opened up further scope to grow in the years to come, not to mention, the opportunity to offer increased value to the Cypriot customer base.
You speak about innovation in GO's product portfolio. Can you explain this?
The economic environment in which we operate has rendered innovation critical to our success and sustainability. We continuously strive to be innovative in the products, services and solutions we offer to our customers.
A most recent example is the SmartHub we have just launched. This modem combines the power of our 4.5G mobile network and our True Fibre network to ensure that our customers enjoy a broadband connection that never fails. The SmartHub was actually designed jointly by our own engineers and an international vendor, and is the perfect solution for an "always-on" connection.
Six months ago we launched our mobile App to provide customers with an easy and accessible way to buy and manage their GO services. While there is nothing particularly innovative about an App, we have gone one step further and developed an App-only product of 10GB internet for €1 a day. This is another great means of keeping our customers connected to the content and services they love. To date, we have over 40,000 App users.
How is the Group faring with its True Fibre rollout?
True Fibre is one of GO's largest investments and one which confirms our position as the biggest investor in Malta's digital infrastructure. We are very proud of the fact that we are the only operator that is delivering True Fibre technology straight to our customers' living room. True Fibre is the best technology available and will set the nation up for its technology needs for hundreds of years to come.
But rolling out True Fibre is not as straight forward as one may think. The complexities are huge as we depend on a number of third parties for permits and other legalities during the planning stage. Implementation is equally hard.
To give you an idea, the roll-out of True Fibre in one post-code area takes an average of 100 days, and this after all the planning and coordination with numerous entities across the island to ensure all legalities are in place. We expect at least 100,000 households to have access to True Fibre technology by the end of this year. We are dedicating every resource possible to expedite the rollout as much as possible. Rest assured that our customers' frustrations in this regard, are also our frustrations.
In an ideal world, we would have the entire nation covered yesterday, but this is literally impossible. One must consider that this is not just about True Fibre rollout. Concurrently we are also maintaining our existing copper network and fixing faults that on most occasions are caused by third party contractors. This notwithstanding, we are making significant inroads.
The results obtained to date are the result of a passionate and committed team of over 100 individuals solely dedicated to the roll out of the project on a full-time basis.
Where do you see this Group in four years' time?
The commercial landscape in which we operate is constantly changing. Technology changes. Customer demands and expectations change. Despite all this, we will still be connecting people to what matters most to them. To do that, we need to continue aligning our purpose and activities in the context of this changing environment.
Our recently launched GO Ventures Start Up fund will certainly open up new opportunities for us to invest outside our core competences. Who knows, we may be on the cusp of the next Unicorn.