"We are now perceived as a utility industry and not perceived as a growth industry"
Mats Granryd is Director General of GSMA and he leads GSMA in supporting its global membership through a range of industry programmes, advocacy initiatives and industry-convening events.
Mats brings to GSMA a wealth of experience and a proven track record of success. Before joining GSMA, Mats was President and CEO of Tele2, one of Europe’s fastest-growing telecom operator.
Previously, he spent 15 years in a various high-profile capacities at Ericsson. Before joining Ericsson, he was a management consultant in telecom strategies at Arrigo and Andersen Consulting.
In an exclusive chat, Mats Granryd spoke to Pravin Prashant, Consulting Editor, VARINDIA, on UN Sustainable Development Goals, digitization of telcos, mobile economy’s contribution to overall economy, mobile broadband impact on society, mobile operator app ecosystem, innovations and 700 MHz spectrum pricing. Excerpts of the interview:
What all did you discuss in the GSMA board meeting held in India?
We covered a full bouquet of mobile operator’s issues and challenges. That is to say, we covered a strategy as to what will an operator look like in ten years, public policy, product and services availability and what we as an industry need to focus on. We also spoke about the purpose of work like are we just here to provide connectivity or do we have a bigger purpose as we are committed to 17 UN Sustainable Development Goals (SDG) and no other industry is better equipped than our industry as it has a huge impact on SDG.
What are you views on Sunil Bharti Mittal taking over as the new chairman of GSMA?
He is a true statesman and phenomenal individual. As a serial entrepreneur, he also has the outreach and phenomenal connections across the globe. He is also representing Asian region which is the fastest-growing region in the world not only from the growth perspective but a lot of innovations also come from Asia.
4.8 billion individuals subscribe to mobile in the world and this makes you the No. 1 association in the world. So how do you see your responsibility considering the large ecosystem?
We take this responsibility very seriously. 17 UN Sustainable Development Goals and the kind of outreach will influence you and me as to how conduct our businesses. SDG app will inform and help you to collaborate. Mindful of privacy and integrity of business, we start to work with other types of NGOs to bring this outreach in a good way.
How GSMA is supporting UN Sustainable Development Goals?
We have done two things. First, we have the app which has been globally launched and we have launched the impact report also. A fairly elaborate report which has a scientific approach to our impact on each and every of those 17 goals and the ambition is to measure it every year to realize the goals. 17 Sustainable Development Goals have 155 sub-goals and we are measuring these sub-goals even. We will continue to work with 4.8 billion people and we will continue to innovate on UN SDG.
What UN Sustainable Development Goals will be achieved before 2030?
Financial inclusion is an important as the cost of remittance through mobile money programme will be achievable. Goal No. 9 infrastructure is also doing very well. Goal No. 5 is gender equality will perform well. In India, 114 million fewer women than men have mobile devices and it is a business opportunity for the industry.
How will digitization impact telcos globally?
We are starting to see the Internet of Things (IoT) and M2M all around us. I think it is the next leap how the industry will increase productivity, but it is also good for the climate as we need not travel that much. Fish farms in Norway are using IoT to feed the fish with the right kind of composition.
What is the contribution of mobile economy to the global GDP?
Globally, mobile contributes around 3.2 per cent of the total GDP which is equal to $3.1 trillion in terms of GDP. For India, it is 6.5 per cent of GDP and it is Rs.900,000 crore and this is expected to reach Rs.1,200,000 crore by 2020. The mobile industry, directly or indirectly, deploys around four million people. Not only connectivity but India is the second-largest smartphone market overtaking the US and of the 250 million smartphones market around two-thirds of all smartphones are manufactured in India. That is a huge step forward.
How do you see mobile broadband globally and its impact on transforming society?
I think it is absolutely pivotal and with the introduction of 4G now picking up dramatically I think we have the capability of having enough speed and low latency that will last us for a while. Around the corner we have 5G that will be standardized in 2020 and we will see the first network at the same time. We have now trial speeds of 10 Gbps with few millisecond of latency. With 5G, one can imagine the types of applications and services that are going to be available like self-driving cars or may be remote surgery. We are going to open up a completely new arena of services and applications with 5G.
How do you look at mobile operators valuation with reference to app ecosystem?
We are now perceived as a utility industry and not perceived as a growth industry. This industry sees double or triple demand of data every year, but we have an issue with monetization and we are working hard. We are doing lot of analysis and that's the reason we are working extremely on this and we had a board meeting on strategy of our industry going forward and it is fairly natural as well as industry's nature and you get introduced to different phases and we are not happy that our total shareholder return is 20 per cent and we should like it to be much bigger.
What are the new innovations which will impact mobile ecosystem?
I think we will see more IoT and more 5G. Significant in terms of identity or Aadhaar and Aadhaar identity is important when it comes to mobile money, mobile identification and mobile verification with whole flora of different kind of services. You will have a different kind of integration with your phone. Voice will be a more important recognition as you might not need your PIN and you can speak and the phone will unlock so these are some of the most important innovations.
What are your views on Digital India?
First of all, it is a commendable dream. I think there is an ample amount of proof points of having a society that is well connected. And that is the type of society that thrives and has an inclusive population and India is a good way on that there. Today, there are 3 million 4G connections and by 2020 it is forecast to reach 280 million 4G connections and that is a good growth story. I think you need to be mindful of backhauling, more spectrum being deployed, competition as price level is a very, very low in India. I think you need to be even more innovative in terms of new services.
GSMA views on spectrum pricing on 700 MHz?
I think it is a delicate balance for any government authority to strike between a very well-connected society with all the positives like inclusion, like thriving economy, like business being developed that is a good thing. And on the other side, having just a financial impact at one time, it is a delicate balance to strike. This time 700 MHz was priced very high considering the low ARPU levels here in India. Today, we don't have a spectrum issue but we have a pricing issue. We have enough spectrum available, but it is not being deployed. That's a shame as spectrum needs to be deployed and used.
How mature is vendor ecosystem in 700 MHz?
Vendor ecosystem is quiet mature in 700 MHz and is being used by TV broadcasters and it is the most sought-after spectrum. 800 MHz was the same thing, but 700 MHz has better propagation.
India will need $34 billion for mobile infrastructure by 2020. Where will this money come from?
Globally, as an industry we have to invest $900 billion by 2020. It has to be done by innovation in OTT players, sharing music, collaborating tool, social media fuelling our network. We are the ones who are connecting everyone and everything and to a better future. And if we are not able to find money, we will not be able to connect and I think we are in big trouble. We are doing to our very best but spectrum pricing is so high that operators will not invest. There should be innovation in terms of pricing models and innovations in terms of different services.
Initially, mobile operator was a carrier but now it is transforming to become a content player. How do you see this shift?
I think you will see lot of different strategy from mobile operators. We used to be an analog luxury product which is not the case. We are a ubiquitous digital product which every one possesses. We are seeing operators buying banks in France. SKT and KT are also buying banks. Japan is also moving with different kinds of business models. As you said, content is being created in several parts of the world. In Mexico, America Movil is doing content with their Claro range of products. Certain operators will take a different path and certain operators will say we will provide good connectivity and there is nothing wrong with that as long as you have the cost structure which can cater to your business model. Some operators will become more horizontal and add on more services and banking is fairly close due to identity and KYC impact and that is the outreach of most operators.
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