Maxis enters second phase of change towards fully-digital

It is entering a new phase where data are supreme and maximising them to push for better earnings becomes key. Lundal shares his thoughts on various issues.

 

 

Is the transformation of Maxis complete after 2 and a half years?

 

No. At that point in 2013, there were two things on my mind. One, for Maxis to be a really good mobile company, as Maxis had lost a lot of momentum in various segments.

 

The other was for Maxis to be a fully-digital company.

 

The first phase is pretty much done. We are now into the second phase of our transformation and it is going to take a few years. It is going to require a lot of people training, capability building, a lot of IT and changes in our distribution. The company is going to change the way it works in the next few years, which I think is very interesting.

 

What does a good mobile company mean to the user?

 

Three things – pleasing the customer, be better than competition and be a quality provider of services and I think we have done the three things.

 

Customer complaints have been, except for the last few weeks, the lowest ever recorded. Customer satisfaction has been at the highest level. We have won market share in revenue and profit and have an organisation where employees have the highest engagement, most positive ever. I think if you take all these strong key performance indicators, I would say we have crossed the high bar of being a really good mobile company.

 

And I am very pleased with that. Six out of 10 customers who are in touch with our customer service would proactively recommend that experience to other people, which based on my history with Vodafone, is a very high number. And complaints are at one of the lowest levels ever recorded in 10 years. I’m just noting that our customers are happy, and that makes me happy.

 

If I were envisioning Maxis inside Vodafone and if I were sitting in that group and assessing Maxis, I would say, yup, one of the better companies. It doesn’t mean we have finished that journey. There are always things that we can improve on. The to-do list when it comes to an even better performance is still long, but in general, we are now a high-quality provider of mobile services.

 

If so, why the outcry over unfair treatment to customers recently over social media?

 

We were giving certain customers certain offers that weren’t available to all customers. That’s the core of the outcry. That’s not unique to us in this industry, not unique for this year. It has happened for many years in our industry and other industries. Financial services, airlines, most service industries will give unique offers to certain customers. The existing customers in Maxis asked “Hey, why am I not getting what the new customers are getting?” I would say that makes sense. I’d still say I understand that sentiment. So, we will adapt.

 

Had there been no incident, would the quota upgrades be given?

 

It takes time for us to do this. All these things had been decided in September, but it takes time to transfer this into the IT systems.

 

The quotas that were offered were in response to the competition. It isn’t that much to customers. Our average user is 1.5GB, so when somebody gives 10GB, 15GB or 20GB, they aren’t that relevant to the customers. Their life is not capped by this lack of enormous data. But our response was that we’re not going to give offers to unique customer groups that are different from the general.

 

I want to make a point that we have upgraded 1.2 million customers, which we didn’t have to. But we upgraded the whole customer base of MaxisONE.

 

We are stopping the practice of giving certain customers unique offers.

 

Maxis has lost over one million customers the past one year?

 

I can give you a perspective on this. There is a segment in Malaysia – I’m guessing between three and five million and I’ve seen this over 10 to 12 years – that changes to whichever operator has the latest promotions. They are very sensitive to the smallest vibrations. They follow all promotions. So, when we had a unique offer called free basic Internet, they all came to Hotlink, because that was the greatest offer.

 

When that offer is copied, they go to other promotions that they think is better for that month. So, we will see relative winners and relative losers based on how these people flock around the various promotions. About 50% of them were customers who had been with us for just a few weeks or a few months. The majority of them are probably multi-SIM cards and lower average revenue per user (Arpu) cards. Of course, when you have enough of them leaving, you’ll feel it in your financials. But that’s what it is, they are multi-SIM, low-Arpu customers and are promotion-seekers who shift around to the lowest promotions.

 

Since the new quota upgrades, has Maxis added more users?

 

We have had tremendous response to our latest offering, queues at Maxis centres. People love data and they want to not think about limits.

 

Customers are so happy to get more data, so they went on YouTube and streamed what they wanted. This is a big change in one week.

 

It’s all driven by video, which has gone from being a marginal customer experience to an everyday thing for most people. This is why our network went up by 50% last year and continues to grow at a tremendous speed.

 

Maxis responded to the competition with more data quotas. What’s next?

 

I think we are the ones responding to competition that has been very much price-focused. So, in that sense, we are doing two things: we are responding to the competition’s dramatic price reductions and we’re also responding to the customer’s desire for more data. We’re not leading in any price race at all. But at this point, people have enough data at affordable prices.

 

With all the extra data quotas, what will the impact be on your earnings?

 

We don’t know how this will play out. Let’s wait and see. Our revenue is a combination of a number of customers paying a certain amount. That certain amount hasn’t changed. The price points are the same as before for Maxis. But now we are offering MaxisONE Share, which is a fantastic offer – RM48 and you get 5GB and unlimited voice and SMS. That’s a challenge to our Arpu in average, but revenues are promoted by volume. If volume is good enough, our revenues will be positively impacted by that.

 

The mobile penetration rate is very high now. What are the growth areas for Maxis?

 

Growth isn’t an easy thing when we already are the size that we are. Maxis is too big a company to grow with ease, especially when most penetration curves have been ridden. I would say that 4G is still early here. 4G is such a different experience from 3G, and it truly is like walking with virtual fibre on your phone. Only a quarter of our phones are 4G-enabled or 4G. We expect the whole transition to 4G to still be an important growth area for us. People spend more when they have the experience of using 4G because they like it so much.

 

That said, there are two areas that we’re looking at for further growth. One is to make homes smarter, to live and operate in a smarter way, and the other is to help companies embrace new ways of working. These two things are still early on in our ambition, but we hope that they can drive growth and differentiation from these two segments.

 

Your 4G strategy?

 

4G has been a great experience for a few in the last few years. We would like to make it a daily habit for the masses, which is to increase the virtual fibre experience that 4G actually is.

 

Where do you see the industry heading?

 

It is a challenging time for the industry, and over time, that may affect customer experience too because we now have essentially five players, five LTE networks in this medium-sized country versus many other countries in the world. That’s a lot.

 

I’m a bit concerned that we’re getting five parallel investments in the most prime areas instead of getting to use the investment more spread out in Malaysia. I’m also concerned that the intense price focus will force everyone to create the best effort products and networks and not be able to provide true quality experiences.

 

I think the market structure in Malaysia, with three players having medium high prices, being able to invest a lot in the market to give great quality experiences, also in rural areas, has been a good structure in the last 20 years.

 

Now with five players, I’m concerned that we might not be able to maintain this high standard of the communication infrastructure moving forward.tive to the mainstream.

 

Maxis’ biggest challenge going forward?

 

I don’t know. I focus on leading the company towards a digital future that is different from today. I’m aiming to maintain my long-term intentions with Maxis’ development and not get too caught up with what happens this week.

 

It is a challenge and it’s what excites me.