MARTIN QUIRKE General Director Bakcell

Martin Quirke, Bakcell’s General Director, speaks about the company’s strengths, its expansion and its unwavering commitment to customer satisfaction.

Mr. Quirke, you have been working on the Kazakh market, as the Co-President of Altel, which presents some similarities with Bakcell. It was the first mobile operator with 20% of the market shares. Based on your previous experience, how would you define Bakcell, the second mobile phone operator in Azerbaijan? What in your opinions are the company's particularities, its strengths, weaknesses and potential?

Bakcell is held as an example of how foreigners can invest in Azerbaijan. It is often spoken of as the first venture involving foreign investment, which was 12 years ago. For a while it was the only mobile operator and had the monopoly of the market. The way it was managed, by both the management team and shareholders did not prevent competition from coming in. Competition is healthy but the competition in this case, Azercell, very quickly established itself on the first place on the market, and so Bakcell went from being a monopolist to place number two of two operators. That is a pity for those involved in Bakcell.

There has been a lack of investment in Bakcell for some extend. Bakcell chose not to invest to keep abreast with the competition. It did take a GSM licence, as Bakcell when it started was working with TASC technology. So it go to GSM.

History of Bakcell is not devoted of problems, but that is history. Now I have been brought in this company, and I would be here if I didn't believe that Bakcell had the potential to improve significantly. So we have already started on that road to improve it. The new Bakcell, with a new management team and a real strategy, and a least some investments, to improve all the areas of operation is on the way now, but this only started this year.

Last year the number of your customers has increased from 300.000 to 700.000, and your market share increased from 25% to 30% not so long ago. What have been the key drivers behind this successful expansion of the company?

There has been more emphasis put on marketing than in the past. And to back that up there were also some investments, back to 2005, which meant that the ability to take on more customers was there, for the second half of 2005. Second half of 2005 is when the growth was experienced, and when the customers number doubled, but that extra capacity in the network was soon taken up and used up and we got to a point of congestion again. That meant that the marketing people in Bakcell could not follow up, because if they had, this would have only worsen the congestion problem; in other words, we had to slow down on marketing. And this is what we did.

That was the situation that I met when I arrived: Bakcell was in search of an expansion of the network coupled with an effective marketing campaign. That was telling you something on the market. Bakcell was able to do that, given that Azercell had many years of being the number one, and dominating, and that must have seriously concerned Azercell people, the fact that some of their customers were taken up by Bakcell, not only the first time mobile phone users, but also Azercell existing customers. That was due to our fare reductions as well, we had more competitive prices. In other words, people believed that they would get more value for their money, and we hope that we can keep that going. We understand that we have to play to our strengths, and to Azercell's weaknesses to some extend. In other words be ahead of the game.

You were stating a lack of investment. If we look at Azercell, they invested more than 400 million US dollars; Azerfon the new player is planning to invest 300 million dollars. What are your priorities for the coming years, and what is your projected level of investment on the market?

Quality is our priority. Quality and competitiveness. That means that we have to do a lot of work on our coverage as well as on the quality of our network, and that is being done. We are just coming to the end of a short-term improvement project in the quality of the network in Baku. This will be followed up by another huge project, which we hope to sign a deal on imminently, that will consolidate our network in the greater Baku area. That will also release a lot of equipment to reinforce our presence in the region where we are weak. So the emphasis is on the consolidation of the network in the greater Baku area, but also in the regions as well. As you know a lot of the population from Baku also travel to the regions in the summer time, and many of them may be disappointed by our services in the region, and on the roads to the region. We know this is one of our weaknesses, and we are trying to eliminate it. This is something that implies some expenditure and investment and we are working on it. Let's just say that so far the investment of Bakcell was stabbed off for years and years, but we have just proved what can be done with a little bit of investment, when we doubled our customer base last year. We intend to build on that and hopefully not lose the momentum that we have built up.

Since 2004 Bakcell has been fully privatized and is now the only private company in this market. How do you think this could be a competitive advantage compared to other operators?

It is a bit early for me to say. I don't have any complain towards our relations with Ministries and towards the way the various ministries react to Bakcell's requests for assistance. Bakcell didn't lose anything being privatised, and I believe Bakcell is highly regarded both by the people in Azerbaijan and by the various Ministries. All I can say now as the Head of the company, with a new management and a new strategy, is that I don't have any complain as per the way Bakcell is received, as the per Bakcell's requests for assistance - whether it comes to frequency spectrum or use of state property - are received. As we are expending, I have to spend time with Ministries, and governmental authorities and agencies and up to now, I found them very respective to assisting Bakcell its expansion and development path.

Your were just mentioning that Bakcell is highly regarded by people in Azerbaijan. How would you define your commitment to customers' satisfaction?

Customer satisfaction is extremely important to me. I have spent a lot of my career facing customers, customers' services, or managing the people that actually deal with the customers. So one of the first things that I did here was to expand and relocate the call center, the interface with the customer. We invested quite a lot of money in that customer relationship management system. This is something that I pay a lot of attention to. In all honesty, the concept of customer service is a weakness in general in Azerbaijan, so I am very keen on addressing that and developing that.

The third mobile phone operator Azerfon will be operating probably at the end of the year on the market. In the context of this increasing competition, how do you regard Bakcell's position, and how prepared are you to cope with a third operator?

The steps that we are taking to face this third operator are the steps that we would take in anyways. We want to make inroads into Azercell's domination in the market. I am personally amazed of the resistance of Bakcell on the market and by its current share of the market. When you weight up the investments in Bakcell over the last decade or more, and you compare that with 250 millions within the last 18 months in Azercell, this shows that the company has a lot of resistance.

Bakcell is currently undergoing a transition phase, lead by yourself. What are the targets that you have assigned yourself, and the major challenges that you are facing in this competitive market?

Before I arrived there didn't seem to be a real strategy. Before with the previous management team, and the owners, the strategy was just to stay on the market. Bakcell was making money and is still making money. But as a third operator is on the way, we even more have to stay on the road.

What we have to do is focus on our quality and value for money. Our mission statement is "marketing lead quality driven". Before this company was more run by people who are more focused on technologies, people with an engineering concept, and not so much into sales and marketing.

Now Bakcell is very focused and concerned on its marketing and customer care, and basically on giving better value, for an equal or better quality. We also want to change the image of the company, which is to some extend, as I had the feeling when I arrived here, in the poor relation.

What is the level of innovation in the services that Bakcell proposes?

We have GPRS already, but the billing system doesn 't allow us to bill GPRS - unlike Azercell. But we are working on that, all these things will be changed, upgraded and replaced. We will have edge. If you talk about 3 G, we'll have that by the end of the year, and we are also aiming at all the technologies that nobody has on the market. I am thinking of introducing stuff and of moving forward.

What we want to do, is of course take the lead in bringing latest technologies in Azerbaijan, through mobile phone or using our mobile network. We are looking at all possibilities to gain a competitive advantage.

How would you define the level of corporate social responsibility in Bakcell and how does it materialize?

Corporate social responsibility has been one of my pet subjects in the last couple of years, already back in Kazakhstan. We actually initiated a Corporate Social responsibility committee, in Amcham, under my Presidency, which became an extremely dynamic organization in Kazakhstan.

Bakcell is favorably disposed towards this idea now. In the past already, Bakcell has always tried to sponsor worldwide causes. However I believe that global social responsibility is something that has not really developed here to a great extend. Social responsibility is still a concept in infancy, especially compared to Kazakhstan. But we are here to make a contribution, to take Bakcell to another level. I personally wouldn't be here if I didn't believe that my presence here couldn't, in some way, even in a small way, make a contribution or improve things in general. Good association can develop with habits. The more we will get people coming here, arriving with the concept of transparency, honesty, social responsibility, the respect of contracts and agreements, with the willingness to help, the rotary spirit, the more these concepts will spread out and the more difference it will make on the society.

This is a dear subject to me. I don't want to just run a mobile phone company, but also to try as best I can, to make some kind of contribution to take Azerbaijan some steps up the ladder.

H.E. Minister Abbasov, Minister of Communications and I.T. has some ambitious plans to develop this sector in Azerbaijan, and wishes to turn the country into a major technological hub. What do you think are the assets that Azerbaijan can capitalize on to establish itself as IT center of the region?

President Ilham Aliyev is trying to enhance the image of Azerbaijan abroad. The organization Azpromo is also acting as a strong ambassador for Azerbaijan, and as a result, Azerbaijan is being acknowledged by more and more countries. What I would recommend now to Azerbaijan would be to look at its neighbor Kazakhstan, which is some steps ahead in its development. Kazakhstan's President recognized that the oil and gas is not going to last forever, and advised to develop other sectors, and the other resources: minerals, coal, copper, gold, zinc, nickel, etc. In Azerbaijan there are lots of resources besides the oil, under the ground, that need to be exploited.

IT and telecom is an essential part of every day life. There is an increasing appetite of people to reach up to the level of technologies that you see in Europe. And that is what Bakcell is working on right now, as well as Azerfon and Azercell.

Bakcell was originally lead and developed by Israeli. They came and took the gamble, they borrowed money and invested, and nobody can take that away from them. But Israel is renowned for its level of expertise in the IT sector. For a small country, a small population, a huge percentage of their exports are actually IT products, and their products are all over the world. So IT&C is a big focus for the country.

The Bakutel exhibition is opening in October this year, and will count more that 30 participating companies. There is already a great interest from American companies in Azerbaijan, like Cisco or Microsoft who have established representative offices in Azerbaijan. How do you think both countries can benefit from this increasing bilateral cooperation? Where do you see areas of cooperation between American and Azeri companies, and in the case of Bakcell what efforts are you putting in developing your relations with American companies?

Bakcell is always interested in American companies. I have myself been working a lot with American companies back in Kazakhstan, and I have always been involved a lot with American companies. Lots of them were member of the American Chamber of Commerce that I was presiding, and I did a lot to support their developments in the neighboring territories.

With the Bakutel exhibition, we expect lots of American companies to come and visit Baku, and that will be a good opportunity for me to meet with them. When these companies come here, I would be very pleased to meet with their representatives. My function as ex President of Amcham in Kazakhstan will definitely help.

There is a common lack of knowledge and understanding on Azerbaijan from the US. Perception of the country is inaccurate, and precisely H.E. President Ilham Aliyev during his last trip to Washington stated the need to create a different picture of the country in the future.

The best way that Bakcell could send a message would be through our own example. We have 400 employees, and this number is increasing all the time; we have a presence that is going to grow throughout Azerbaijan. The way we take care of our business, the way we take care of our employees, our commitment to transparency and the way we keep out from doing things under the table, the way that we do that and the fact that we are still successful; this is the real message to pass on. I hope that people consider this, and I hope that this has an influence.

Bakcell is an important company. It was the first investor, has been privatized, and is still going, and going stronger and stronger. If this company gets this reputation and is seen as getting better and better, as a great place of being employed, with health and safety standards (concepts that people don't consider so much here, just like customer service), there will be a lot of things that we will introduce and a lot of things that we will change. And hopefully, that will enable Bakcell to be held up as something approaching the standard of a company in the world that Azerbaijan aspires to, WTO access, etc.

If you had the opportunity to address a final message on Bakcell or on Azerbaijan to the American audience of USA Today, what would you like to tell them?

This is the reason why I am sitting here in this chair. I have not been invited here by a courteous gesture from the owners of this company, but I am here because of what I have been doing, the level I have been doing it and the people I have been mixing with. So I will play my part to promote investment into Azerbaijan. Whoever wants to come, from China, the USA, or Singapore, I would like to sit down with them, and give them my own and honest perception on how to do business in Azerbaijan. There will be some banana skins and mouse traps, but we can help you avoid those and get your job done, and get a return on investment.

Thank you very much for this interview, and we wish you the best of luck for the future!