PARATUS TELECOM: THE FACE OF CHANGE FOR THE TELECOMMUNICATIONS MARKET

By Tiri Masawi and Rosalia David
May 2016
Prime Business

Namibia’s first privately-owned telecommunications operator, Paratus Telecom, launched their 4G LTE mobile data service recently and has plans to roll out the service in Khomas Region, Erongo Region and also Oshana region in a bid to provide consumers with alternative solutions. Paratus is also on the move to roll out their Voice over LTE (VoLTE) in the foreseeable future. Paratus’ LTE mobile data services makes them the third mobile telecommunications operator in the country. The company’s Chief Operations Officer, Schalk Erasmus, sat down with Prime Focus Managing Editor, Tiri Masawi and Journalist, Rosalia David to discuss the company’s road map in improving ICT as well as contributing to a competitive sector with different products that will suit the needs of the Namibian market.

Prime Focus: Paratus Telecom Namibia comes into the market where there is serious state monopoly in the ICT sector, do you think the products that your company is offering has what it takes to fight for market space?

Erasmus
: One of the things I emphasised at the launch is that we provide the customer with a choice. We are about sharing technology with everyone. The Minister of Information Communication and Technology (ICT) has made it very clear that it is all about infrastructure sharing and levelling the playing field for everyone. Therefore, what we do as a private company is to create bundles or packages for individuals which are tailored to their needs so the option for the market is then to talk to us regarding a specific package that was tailored for that individual or that company. One of my colleagues recently asked me about a customer who is requesting for a specific package and I told we can create that package for him to suit his requirements. We have a different approach compared to state-owned companies, that will only have a certain set of products and not go and spend time and money creating requested specific individual packages based on the requirements that are out there. In our case it is about creating a tailor-made package and it’s about sharing and creating an alternative for the market.

Prime Focus: Having successfully launched the 4G LTE mobile data service, please give a brief lay out plan on how the company plans to expand its services to the outlying areas of the country where the majority do not have access to internet?

Erasmus
: We have a phased approach to a national roll out. During phase one, we will be focusing on our region (Khomas) which we will finish in the middle of the year whereafter we will expand to the Erongo region, focusing on towns like Swakopmund and Walvis Bay. After completing this coastal phase, we will be targeting the Oshana region and focus on towns like Oshakati and Ondangwa. Our business focus is on where the population is, which was made clear by our market research. Our focus is to go where there is a demand and because we are a private company we need to ensure that whatever we do will also be profitable. Due to us not being a state-owned company, we do not receive funds from government to go service the rural areas or the under-developed areas. This means that we need to evaluate any expansion and its viability purely from a business profitability perspective.

Prime Focus: With Paratus Telecom being in the process of developing Voice Over LTE, do you think the market is now ready for a new entrant and that there is space for three mobile telecommunications companies?

Erasmus:
The market is definitely ready for a new entrant that offers something different. The fact that one can watch Netflix for instance is a clear indication that it is something different. Voice over LTE will be another differentiator in our market and industry. The problem with Voice over LTE is that it is not yet fully supported on most devices so one really needs to get a smartphone or an LTE phone that can support Voice over LTE. In our case, if we do launch the product, we need to make sure that there is enough Customer Premises Equipment’s (CPE) or phones that support Voice over LTE. We also believe that the world of communication is dynamic and there is a fast growing market for technological gadgets.

Prime Focus: As a private company do you think that there is enough space for private companies to penetrate in the ICT market? If not, what do you think should be done?

Erasmus:
It is all about vision. I believe in Vision 2030. People would want to connect and people would eventually upgrade from using traditional phones to smartphones that support LTE. I believe it is also about the availability and the cost of these devices. Costs will eventually come down because we are seeing phones that are manufactured in India for instance and the prices are very attractive in comparison to the contemporary phones offered.
If you look at the iPhone for instance. It was only launched nine years ago as the first smartphone created that
did not have a fixed keyboard. It was all touchscreen and that revolutionised the entire industry. Samsung then quickly realised that they needed to adapt their phones and their strategy to follow Apple’s example. There have been court cases between the two, with Apple claiming that Samsung copied their concepts but Apple set a trend and all the other players in the industry followed it. Today, Samsung is the biggest hardware manufacturer because of following what the other companies did. The market might not be ready today but it would definitely be ready tomorrow. What we are doing today, is tomorrow’s technology. We are just being an enabler to create a network which everyone can use once they have adapted the technology.


Prime Focus: Do you think the government is doing a good job in encouraging private investment in the country?

Erasmus
: Government is playing a big role in changing the industry and I believe that since the new communications act that was signed in 2009, things are definitely changing. I would say government, through the regulator, is definitely playing a big role in changing the industry.

Prime Focus: If you had to rate the ICT sector in the country, would you say it is where it’s supposed to be in terms of service delivery and innovation?

Erasmus:
I think we are doing a great job. It is a pity that we only have a population of 2.2 million people. We would have done much better in Namibia if we had more people using the services and I believe there would have been more operators in the game. The fact that there are only two dominant operators in the country means that customers don’t really have a choice especially if you have both a fixed line and mobile operator. Now the market has changed as there are other operators and I think the market is ready and growing.

Prime Focus: How would the new product improve Paratus Telecom’s turnover and what does the company aim to achieve with its launch?

Erasmus:
It is a new service and a whole new revenue stream for us. It is business we have not had
before and a service we could not offer. This naturally means that it will increase our revenue and turnover. Previously, we could not offer all these services so it will definitely play a vital role in our business going forward.

Prime Focus: How much has the company set aside to improve its infrastructure development and expansion for the next five years?

Erasmus:
We started a relationship with the Development Bank of Namibia (DBN) a year ago and through DBN we could roll out the first phase. We are currently in the process of discussing the additional phases. We are looking at external financing because infrastructure is not cheap. It is not something one can roll out on a day-to-day cash flow so for us it is imperative to partner up with DBN or find other financial or equity partners to roll out the other phases. Infrastructure development is an unstoppable force once it is in motion, and we have actively set the ball in motion in the industry with a clear plan on further development phases.

Prime Focus: How many people are employed at Paratus Telecom?

Erasmus:
In Namibia we are over 200 people.

Prime Focus: Paratus Telecom is the sponsor of the national senior rugby team, the Welwitschias, in their participation of the 2016 Currie Cup. What else has the company done to make sure that it fulfils its social responsibilities?

Erasmus:
We are involved in various projects. At the moment I am also talking to various schools in Keetmanshoop about a new private school event that will take place in a month’s time. We are quite active in the regions and not just in Windhoek. We have sponsored various soccer clubs and private individuals and are also involved in projects aimed at promoting cancer awareness. We have also engaged in a bursary scholarship program and we are proud to support three students, two of which are studying in South Africa and one studying at a local tertiary institution.

We are also very proud to be a huge sponsor for our national rugby team and we feel proud to be contributing towards the improvement of Namibians.

Prime Focus: The major challenge faced by most companies is the unveiling of infrastructure, how do you plan on dealing with this challenge when you roll out your countrywide expansion?

Erasmus:
For us, it is a big challenge because throughout the years the dominant operators have been very active in building infrastructure all over the country. Sometimes there are towers right next to each other. I drove to Swakopmund recently and saw two towers adjacent to each other, one belonging to Telecom and the other to MTC. It is actually really embarrassing because, if infrastructure sharing was already in place, there would only have been only one tower impacting the environment and not two.

I have also been travelling across Africa and I have seen places in Tanzania, for instance if you drive from Kilimanjaro airport towards Arusha, you will see that there are three towers on the hill right next to each other due to each operator having to construct its own tower, which detracts from the beauty of the landscape. This means that there is no infrastructure sharing in place.

For a third operator to build a third tower right next to the other two it is really unnecessary and it also creates an environmental impact because not only does it detract from Namibia’s truly amazing scenery but it also affects the natural ecological habitat of various wildlife and fauna and flora. Therefore, we are pushing hard for infrastructure sharing and it is something that CRAN is busy fighting for at this point in time. They (CRAN) are very close to finalising the infrastructure sharing regulations but it is not in place yet. It is thus still difficult for us to get access to towers and the biggest problem is time. We have been asking for the DOBRA tower for years now and it is being finalised but it’s taking very long to find a suitable site and get the site commissioned.
With infrastructure sharing coming into play, the biggest advantage would be the roll-out speed.

Prime Focus: Government has also been agitating for infrastructure sharing in the ICT sector. Do you also share this sentiment and do you feel it will go a long way in improving accessibility of the market space?

Erasmus:
We are very pro-infrastructure sharing and to this end we are already sharing infrastructure with various companies. For instance, we were one of the first companies in Namibian that shared infrastructure in 2006 when we got our international data gateway licence. We were sharing our VSAT with the likes of Africa online, Cell One and MTC but some people don’t know these things. In 2008, we launched a big earth station and we called it Omajova which means ‘mushroom’ in one of our indigenous languages.

Prior to the landing of the West Africa Cable System (WACS), we delivered much-needed international bandwidth capacity via satellite into Namibia and we delivered capacity at wholesale to MTC. MTC’s data users were in fact using our earth station capacity in conjunction with other suppliers when they were browsing the internet so we delivered the internet to MTC users indirectly. This means that we have been doing infrastructure sharing for a while and we have recently partnered up with another organization in Windhoek to share our LTE network.

We support the idea of infrastructure sharing.

Prime Focus: Could you please give a brief overview of the products that are offered by Paratus Telecom?

Erasmus:
We have different kinds of customers including those with a (SOHO) Small Office Home Office. In today’s world, technology enables people to work from home. We have products specifically for SOHO businesses where we provide fixed line service or mobile services with LTE to clients.

We have various packages and products specifically for the smaller industries. We also have corporate services that we supply to the financial services sector for instance. We are running connectivity to all major commercial financial institutions. In fact, one of our customers is FNB which is situated right next to our offices.

We have installed fibre optic cables for them and provide services to all their branches in Namibia. We also provide services to most of their speed points around the country which is essentially a GSM modem connected to the speed point. We offer connectivity to FNB ATMs as well. We have also developed a new product where one can monitor an ATM for potential robbers, if people want to open and break an ATM the camera will then respond on it or trigger an alarm and the person who is in charge of patrolling that specific ATM will be alerted. We will be launching this new technology with their branches where they will be able to monitor their ATMs so that banks will not run into problems such as ATMs being out of money or vandalised.

Apart from the corporate connectivity, we provide internet, security and cloud services. Some of the cloud services we provide offer our clients the ability to access virtual servers. People don’t have to go buy physical servers anymore.

We are busy exploring the way the IoT (Internet of Things) will work. As an example, when you eventually walk into your house your fridge will tell you that there is no milk. In fact, the fridge can order the milk and you would be able to have direct home delivery as a service.

We are also busy exploring connectivity in the car through 4G LTE. We are building an enabling future network that can sustain the things of tomorrow.

Prime Focus: Internet has become a vital tool in the workplace and education sector. Which products do you offer that have the potential to assist the tertiary education sector?

Erasmus:
We recently had a meeting with the Namibia University of Science and Technology (NUST). We are considering a new package designed specifically for students. The university has up to15 000 registrations per semester. The package will cater for free access to all the programmes and products that the university is running and by buying a Wingle device, the student would be able to access all lectures online.

We also invited the student council from both UNAM and NUST to our launch event so they can see what we offer.

We are also selling a ‘my Wi-Fi’ device that has a built-in battery to use during breaks or after class to give them and their friends access to Wi-Fi.

Prime Focus: The major bottleneck on ICT products has always been cost. What is your modus operandi in making sure that all your products offer value for money?

Erasmus:
The fact that we are offering a package for less than N$400 per month that is reliable and can be used for social media means we are providing an affordable service. People don’t want to send SMSs anymore. People want to use WhatsApp and today people can create groups of up to 250 people on WhatsApp so they can easily communicate. Even Nampol can use WhatsApp now to be productive. We are creating a package with unlimited WhatsApp that can be used by everyone and it doesn’t need to cost you extra.

Prime Focus: How do you view the local market when it comes to offering financial assistance to the expansion of the ICT sector?

Erasmus:
We are a service enabler and by offering a service, there is a big potential of additional revenue opportunities that allow people to sell and buy goods online. For example, if you go sit at Zoo Park
and turn on your ‘myWi-fi’ device, everyone can actually be productive while on lunch. They can do banking
and it is all about sharing. I think we are definitely making a contribution to the financial sector when you add this to all the other corporate social responsibility projects we are engaged in.