Read the interview of Cablenet CEO Yiannos Michaelides to Insider.
Mobile Telephony is a great challenge.
We’ll take on the competition on equal terms and aim for a significant market share.
Cablenet CEO Yannos Michaelides reveals that the company is planning to invest more than €50 million over the next few years. The plans include the development of 5G networks but there’s quite a way to go before that.
Mr. Michaelides comments on how the company dealt with the challenges caused by the pandemic with measures to protect consumers and its employees, while noting that, in the post-coronavirus era, everything has shifted towards a more digital way of service.
How did a telecommunications provider experience the pandemic-related lockdown period? What changed, both in terms of your and your subscribers’ habits?
As soon as the lockdown due to the COVID-19 pandemic was announced, we ready for action. Cablenet’s main concern was – and continues to be – protection and safeguarding our employees and subscribers’ health. We have always stood by them and continue to do so, which is why we never stopped responding, paying attention and with devotion to their needs or anything that concerns our offered services.
With a strong sense of responsibility to people and the community, the company adhered to all health protocols. Within a few days, we managed to adapt to the new circumstances, proceeding with increased health and safety measures in order to continue offering our services. We considered it our duty to temporarily suspend operation of all our stores, nonetheless continuing the normal servicing of subscribers via the customer call centre.
Our installation and faults department continued to operate normally, increasing protective measures. Facilities offered for the better electronic servicing of clients (online payments, product purchases etc.) were also extremely important. We also offered additional benefits, such as increases in speed and data volume and enhancing our sports channels programme.
Even today, 80% of our employees are still working from home but this doesn’t mean that the high performance levels have decreased. On the contrary, performance has remained stable and, in some cases, has even increased significantly.
Now as CEO, what do you believe the telecommunications sector in Cyprus needs in order to further improve?
First of all, I would like to point out that telecommunications in Cyprus are at an overall very high level. All providers have made significant investments and are following market trends. It also helps that there are remarkable executives in Cyprus, who have significant experience and are not lacking in any way compared to their counterparts in international companies.
However, the thing that has been missing until now has been a very specific vision that determines the role of each industry and how it can contribute to an overall digital vision concerning the country. I am truly happy that the creation of the new Deputy Ministry of Research, Innovation and Digital Policy indicates that this vision is being built with the correct structure and in the right direction.
A country like Cyprus, with both its familiar scope and differentiated consumer habits, needs targeted investments rather than simply copying large markets. If we focus on specific sectors and applications, there can be diversification and real effect on the economy and an increase in the quality of life. In addition, a country with a digital vision needs centralised management of all issues in order to facilitate investors, as well as provide the correct incentives that will contribute to its development.
Another area with room for improvement is the Digital Economy and Society Index (DESI). In of the DESI’s parameters, the EU has set a 2020 target for all households (100%) to have access to networks with speeds above 30Mbps and for 50% to be connected with speeds above 100Mbps. Unfortunately, Cyprus is ranked amongst the lowest between countries. We are proud that we as Cablenet offer our own proprietary, technologically-advanced network, where all our customers, irrespective of their premises’ location, have access to speeds starting at 60Mbps at very affordable prices. We will continue to invest in order to strengthen Cyprus’s position in that index.
Since the beginning of 2020, the company’s share capital has changed, primarily due to the share increase by Maltese company GO. The same is true for the loan agreement amount. How can these two points be interpreted from a business perspective and what can we expect in the future?
Firstly, the fact that GO continues to invest in Cablenet with loan capitalisation and the subsequent share increase proves its great trust in both the company and its future plans. Specifically, GO’s investment in Cablenet since 2014 has already multiplied the value of its initial capital investment. In addition, GO’s strong financial position shows that it is able to support the company in its major development projects.
At the same time, however, as already announced, Cablenet is seeking alternative sources of financing from markets via the issuing of bonds of €40 million in Malta. It is an ambitious plan and possibly one of few where Cypriot companies approach foreign investors in this way. However, this is still following the legal procedure and we will soon find out its outcome.
The cancellation of domestic and overseas sports competitions was a great blow. What are Cablenet’s plans for the new sports season?
As already announced, we and the other platforms have agreed to bring all football together so that it will screened everywhere. The coronavirus may keep us apart but football has truly negated distances! It’s something that we had discussed for a very long time, at different periods of time, and, of course, it’s something that the Cypriot community had wanted. We believe that it’s an excellent development that offers football fans a fantastic option, especially during this difficult period. We are certain that the combination of Cablenet’s fastest internet and a true footballing spectacle comprised of local and overseas content will offer a unique and attractive option.
The mobile telephony chapter: Even though Cablenet offers mobile telephony packages, it still doesn’t have a large market share. Is future greater expansion within its strategy? If so, in what way and how will the company be different to the other providers?
We purposely did not promote mobile telephony until certain conditions were met. The most significant prerequisite was that we would get our own range (frequencies) which, it goes without saying, involves our ability to have our own network. We managed this last year, after successfully bidding to acquire 4G frequencies. So, within the next five years, we are planning for a very significant investment in excess of €50 million, in order to enter the market’s competitive ‘arena’ on equal footing. In a few months, Cablenet will enter this important sector more forcefully, with the latest that technology has to offer.
There will be palpable differentiation. In a continuation of our perennial philosophy, the combination of value and price that Cablenet will offer will be closer to what citizens all over Europe enjoy. We believe that this, combined with the rest of our now-proven popular services and our leading subscriber service, is something that Cypriot consumers have been waiting for a very long time.
Is the above-mentioned more intense activity connected to the arrival of 5G in Cyprus?
For us, increased activity in mobile telephony is unrelated to the arrival of 5G. 5G is a long way away from being in a position to be commercially available. At the same time, all providers have requested that clear facilitation for the development of 5G networks be a prerequisite, due to the familiar issues. In addition, existing networks can fulfil the Cypriot consumer’s needs for many years to come.
Cablenet greatest strength is its internet service. How do you plan to strengthen it further? What does your mid-term investment programme involve?
Cablenet’s fixed network currently covers approximately 60% of unoccupied Cyprus. This year, expansion of our network will be even more vigorous and will concern coverage of all large urban and rural areas. We are investing many millions to this end and hope that, in two years from now, our coverage will have increased significantly.
We know that people embrace Cablenet wherever it goes and that we gain up to 40% of the market share. High speeds are synonymous with Cablenet and we are the only ones who have the technology to be able to offer them to our subscriber base at affordable prices. In addition, we are investing in a completely new, next generation TV platform which, combined with our high speeds, will offer a fantastic experience. It will be surprising! The combination of all of Cablenet’s services with the new mobile telephony is what will stand out over the next few months.
Do you believe that, given the size of Cyprus, there are enough providers or is there room for additional players? Perhaps mergers are necessary?
Cyprus certainly has enough providers given the size of the market. There is scope for mergers or even possible collaborations in various sectors, naturally in the context of healthy competition. As Cablenet, we have a good footing for such activities due to the fact that we are the only private company that has its own proprietary fixed network.
We are half-way through 2020 and we have already experienced a lot. What challenges does Cablenet have to face?
Cablenet’s great challenge is to accelerate its growth trajectory in a mature and highly-competitive market. In particular, the challenge of mobile telephony as a new source of income for the company is certainly a very significant development.
The other great challenge is the relationship with subscribers, as well as the company’s employees, both during and after the coronavirus pandemic. Everything has changed. The acceleration of digital reform in the way of selling and servicing and the new working conditions make new planning a necessity for our business plan. We plan to create a ‘digitalisation storm’.
As the company’s new CEO, what is your ultimate goal?
The ultimate goal is a dynamic entry into the mobile telephony market and the simultaneous acceleration of development in traditional services. The value of mobile telephony in Cyprus is equivalent to around 50% of the entire telecommunications market in Cyprus. Cablenet does not have a share in this large market and we believe we can lay the foundations so that it can assert its claim.
An equally important objective – and this may come across as non-traditional – is the establishment of Cablenet as a leading, first-choice employer in the sector! I have had the good fortune to work in various countries of the world and to experience different management models. Irrespective of ethnicity, there is something that is intensely common in all people: the desire to all do something that gives meaning to their lives, to be duly appreciated and to have opportunity for personal growth. If a company manages to fulfil all this to a great extent – something which is not easy to do – it will, I believe note a significant increase in its performance.