Competition must not be at the expense of a sustainable business model, tells Vodafone Malta CEO Iñaki Berroeta.

Balance must be achieved between competition in the Maltese telecoms market and sustainability, according to Iñaki Berroeta, CEO of Vodafone Malta, in his first interview with The Sunday Times last month.

Mr Berroeta said economies of scale are difficult to find in a country of 400,000 people - the next bigger market Vodafone operates in has two million customers. "If you look at number portability, Vodafone is trading customers quite significantly (with competitors Go Mobile).

"At the same time, there is the potential of a third licence and some virtual network operators. From my point of view, that is a lot of competition for the size of the market."

Mr Berroeta warned: "That is something we have to be careful about because in other places where this has happened, like Denmark, the customer does not always benefit." It is important for operators to be committed to continue their investments, so that investment in the country continues to increase.

"I am very afraid of a situation where, if you have too many competitors, the business does not sustain that kind of investment and you fall technologically behind. This is what the Regulator has to do and I hope they do a good job."

On its part, Mr Berroeta said, Vodafone Malta is going to undertake a significant investment in its 3G network over the next 12-18 months to enhance its 100 per cent coverage, increase capacity and deliver a higher speed 3G connection.

He showed me the latest 3G modem that the client carries with him or her - at home, the office, abroad or at his/her weekend retreat. "My vision - and that of Vodafone - is that we are a mobile communication company that wants to provide all kinds of services to our customers.

"Right now the needs of the customer are not about the technology behind the service but about being able to communicate through voice or data wherever he or she is."

In this area Vodafone Malta launched a new promotional offer, Vodafone Liberty, enabling its customers to benefit from this 3G Broadband connection with no download limit at Lm9.99 a month. This offer includes the portable Vodafone USB modem, which can be used on a laptop or personal computer.

Customers who travel benefit from a single roaming rate of Lm1.50 per MB with no set up charge on Vodafone's preferred networks. This new version of the 3G broadband data card, designed for users of computers, laptops and Apple MacBooks, allows customers to access 3G broadband by simply plugging it into the USB slot on their computer.

Vodafone's USB modem received the award for Business Innovation of the Year at the 2007 Mobile Today Awards.

Mr Berroeta is proud that Malta is the first country in the world to have nationwide coverage of WiMAX, which was introduced last July. "WiMAX is basically wireless DSL, bringing broadband communication without the need to lay out cables with speeds that go up to 4MB per second."

The service is targeted at both business users and consumers, enabling connectivity to your fixed phone, broadband and mobile all in one. This is a product that will continue to be developed in the near future.

My initial question to Mr Berroeta as we settled down for a chat in his office at Vodafone's head offices in Valley Road, Birkirkara, was to outline the qualities he brought to the job - the first CEO position he is holding in his career. He immediately outlined the salient points of his career: a telecoms engineering graduate from the University of the Basque Country, Bilbao, Spain, he obtained an MBA from Henley Management College in 2004. He has worked in Spain and the United States, first in IT systems, IT consulting and management.

He has managed a software development centre with 300 developers, reducing costs and improving efficiency. "That was important at the time in software; now it is important in the whole company," he observed.

"Reducing costs is always healthy, especially in companies that have had such a tremendous growth. So, when you grow so fast, you cannot put all your resources to grow and maybe you don't do it in the most efficient manner.

"So, there are a lot of things you can work on to reduce costs without having an impact on the service that you deliver."

When Vodafone started a Global Leadership Programme, which gives people the opportunity to have some training and get some exposure, Mr Berroeta said he took the opportunity to change direction more towards senior management and marketing.

He next went to product marketing for business and launched a mobile connect card; Blackberry in Spain; and other data products.

His last position before moving to Malta to replace Hatem Dowidar (who was appointed to a position at head office in UK as head of Vodafone's Partner Network Programme, which comprises the companies Vodafone does not own shares in that want to sell its products) was as regional sales director for northern Spain of Vodafone.

"Sales is where you can really feel the heartbeat of a company," he said. "You see how everything is working because what you offer the customer is the end product. So, it is really a very good place to understand, work and improve; what things we are doing well, (and) where we need to improve."

Although he knew little about Malta before he arrived, and had met a few people from Vodafone Malta before, he said he was impressed with how motivated the local company's 300 staff are: "(they) really see Vodafone as part of them. Even on the first day I walked in here, you sense that there is a very big linkage between the employees here and the brand and the company; a lot of commitment."

Vodafone Malta, he recalled, is 17 years old - one of the oldest operating companies within the Vodafone Group. "In terms of products (it) is quite diversified; we have WiMAX, an international gateway (and) many things that are particular about this operating company."

Apart from its huge investment in its 3G network (basically another network added on to the previous network - so now Vodafone has two networks for the same amount of people and for the same business) it also earns a big chunk of its revenues from roaming - the tourists and people who come from abroad on business.

"That is an area where, because of the regulation, we are in a decreasing mode. The amount of money that you can earn is less as the prices are going down, which I think, at the same time, is good because roaming is an excellent product."

Vodafone launched its Passport product for roaming in April and, though prices have come down "quite a bit", Mr Berroeta reported that traffic volume in terms of minutes has gone up "a lot".

He pointed out that, unlike other Vodafone operating companies, the Malta company does "pretty much everything in-house". This, he added, "has its benefits and, given the size of the country and the level of services that you can outsource, I think it makes a lot of sense".

As an example he mentioned the call centre, which is manned fully by Vodafone Malta staff and he sees it as part of its core business "because it very much ties to the level of customer satisfaction. At the end of the day, our customer wants a good service; something he can really use to do meetings, communicate, be more productive, but also perform and, calls us."

When I mentioned captive insurance, Mr Berroeta said this is a separate business. "We don't mix that up with the operation, but it is something that Vodafone wanted to do because there are fiscal benefits.

"Now that Malta is in the eurozone, it makes a lot of sense and I think that this country is going to get a lot of business out of that - it is going to bomb."

Asked what targets he had set his team at Vodafone Malta, he replied: "We are going to look at the different processes of the company and we are going to take advantage of what the group can provide us. One of the advantages we have here at Vodafone is that we are part of the biggest mobile communication company in the world, with a very strong brand.

"We are the biggest purchasers of handsets in the world and network equipment. That gives us, for our small size, the same purchasing power as Germany, for example.

"We will be working a lot on supply chain management, logistics. We will also work on our retail network and we will definitely work on our customer care service. We want to be number one in customer satisfaction always for all our customers.

"In terms of offers, we are going to bring a lot more products to the market, not just offering a product and a tariff but more of a way of selling something that is really beneficial in terms of how a company can increase productivity with a 3G modem or how an individual can be more productive using mobile e-mail."

Mr Berroeta is keen to introduce products that are business propositions that can help customers be more productive and, at the same time, more innovative in what they are doing to their own customers.

My parting remark related to content, especially mobile TV as offered by an operator in Italy. To this he replied that the content was more important than the technology behind its delivery. "I am not a big fan of bundles," he went on. "There are a lot of companies in Malta and Europe that are offering bundles and it does not work that well for the customer.

"If I am a customer, I want to have a good TV offering, a good mobile service and a good broadband service. That does not necessarily come in a bundle, nor is it necessarily cheaper in a bundle. So, traditionally, bundles have not worked in the market.

"If we launched something related to TV here it is because we are going to offer the best TV service, otherwise we would not launch it. We are number one in mobile, I think we will be number one in broadband and many things, but if we have to launch TV it is because we think we can provide the best content."

Mr Berroeta said it came as a surprise to him to see how Vodafone is approaching music in Malta "and it is best practice that could be shared by other companies. Malta is a place where people like music.

"There are many good local bands. To me, the quality is amazing. We just launched our music jam last week; we promote a lot of music among our customers, who can download music.

"We invite them to concerts because, at the end of the day, listening to music on a mobile phone is great but Vodafone can bring you the live experience of going to see the concert. We have to be there as well. We owe it to our customers. It promotes culture and local bands. So, it is a win-win for us. Certainly, we will be doing more in that sense."