Vodafone Malta’s outgoing chief executive officer Iñaki Berroeta will continue to travel to the island regularly for a few months to ensure a smooth transition after he takes up leadership of the global mobile operator’s Romania business on December 1.
Mr Berroeta, who succeeded Hatem Dowidar at the helm of Vodafone Malta in 2007, will also remain on the company’s board for a while. A new CEO for Malta will be named shortly.
“It is always sad to leave,” Mr Berroeta told The Times Business. “I will miss Malta very much. My family and I have made many friends here and we have enjoyed everything that Malta has to offer in terms of quality of life. Not many countries present the ‘package’ Malta can. We will be back on holiday, for sure.”
Mr Berroeta said he leaves behind a company focused on ensuring its service was of high enough quality so that all of its customers – now numbering around 230,000 – would recommend Vodafone.
The Malta market, he added, will not grow much further but Vodafone was seeing healthy growth figures this month. Mr Berroeta believed the company could expand by doing business better than the competition.
Looking back on his term in Malta, Mr Berroeta admitted the mobile telephony market had undergone a revolution during the past three years; Vodafone now had to do things differently to adapt to the evolving scenario.
Since 2007, Maltacom rebranded to Go and cable company Melita changed ownership and launched its own mobile offering. Vodafone opened its network to mobile virtual network operators which brought more competition. Customers were presented with more choice. Malta’s entire telecoms market is now worth €250 million.
“The development of the Maltese market has been very good for the business and consumers,” Mr Berroeta said. “All this happened quite rapidly compared to other countries and there was pressure on the market to deliver. Malta is a micro-market but there are as many mobile telephony players as there would be in markets a hundred times larger. The size of the market allows for rapid development.”
Mr Berroeta has led Vodafone to increase its edge over the competition and invest €15 million to swap its network for a faster, more energy-efficient network in record time thanks to “the best technology team” in the country. He said constant investment in the network was necessary not only to provide customers with the best quality coverage but also because of the looming opportunity to prepare for the arrival of smartphones.
“The smartphone is an excellent productivity tool and it was being requested by many international firms who were establishing in Malta and local businesses which were doing business overseas,” Mr Berroeta recalled. “Consumers were also demanding mobile internet. Vodafone brought Blackberry and Apple to Malta in 2008. Since then we have worked hard to ensure we have the best smartphone portfolio in Malta.”
Around 40 per cent of handset sales involve a smartphone and Mr Berroeta is convinced that by mid-2011 Vodafone Malta will sell more smartphones than regular mobile phones.
The demand for smartphones has soared, possibly because their arrival on the local market was several years late – the Blackberry appeared in Malta in 2008, six years after its European debut. Smartphones’ introduction to Malta required significant prior investment but the consumer has repaid the operators’ confidence in the market. The Maltese market’s growth in the smartphone segment was now significantly faster than the European average and Malta will soon catch up in terms of usage.
Over the past few years Vodafone has focused significant resources to be a straightforward company to deal with, hence the redefinition of the retail experience provided in Vodafone stores and the service delivery levels produced by the call centre.
Mr Berroeta said Vodafone had worked hard to maximise customer value over the past three years. Services levels had risen considerably to give individual and business customers added value in terms of benefits. Vodafone had also reduced its pricing by 20 to 25 per cent every year since 2007.
“Malta now compares well with average European markets, especially since the local market does not present operators with the economies of scale of larger markets,” Mr Berroeta pointed out.
“The biggest issue with price comparison – and this is not always very clear – is that different markets charge differently. Some European countries charge a call set-up fee and a low per minute rate. Even at EU level, comparisons are made between rates and the set-up fee is ignored. One benefit we have in Malta is we are very clear – there are no set-up costs or hidden charges, just a rate per second or per minute.”
Operators are, however, still in dispute with the government over the three per cent excise tax charged on mobile telephony, which had to be partly reflected in pricing. Mr Berroeta believed it was discriminatory to slap an excise tax on mobile telephony when there was no similar burden on the fixed service. The measure artificially penalised mobile communications.
“Mobile communication is a necessity – it contributes to businesses’ productivity. Taxing it makes no sense,” he stressed.
Mr Berroeta said he was particularly sad to leave the “hard-working, customer-focused, professional” team at Vodafone Malta. The locomotive pace of the business meant staff worked many hours and weekends, but Vodafone had a generous rewards system in place, which included study grants and benefits.
Thanks to its 17-week maternity leave policy – which is set to be increased further – and a reduced-hours option, Vodafone was able to retain numerous working mothers within its teams. It was also able to have a team with an average age in the late 20s and which reflected the customer base.
Vodafone Malta shared in the group’s diversity and inclusion culture, Mr Berroeta added, which allowed it to attract the best talent and offer high service levels.
Vodafone Malta was also a good citizen, he pointed out. Next month it will publish its third corporate social responsibility report, after being the first local company to issue one.
Mr Berroeta described the company’s own charity, the long-established Vodafone Malta Foundation, as a “remarkable institution that was setting an example to other companies to divert some of the benefits it reaped as a business into society”.
He said he was looking forward to taking up the post in Romania where Vodafone is the second largest player with nine million customers in a market shared by up to six operators including Orange and Deutsche Telecom. With a population of 22 million, the country currently faces a challenging economic situation: Romania had seen staggering growth just before the recession hit it hard.