We already know NTS as a GSM and 3G cellular operator in Indonesia. AXIS is the brand identity of NTS. If you are in East Java or in Bandung, you should have seen billboards showing promotion programs from AXIS. What are the strengths and strategies of AXIS to compete in the market? Below is an exclusive interview between T&t and NTS President Director Erik Aas. Erik joined AXIS on October 2007. He has seven years of top management experience in Asia. Previously, Erik was the CEO of Grameenphone, a telecommunication operator company in Bangladesh, since November 2004 until October 2007. Under his leadership, the subscribers of Grameenphone rapidly developed from 2 million to 15 million subscribers. In addition, the company successfully grabbed 60 percent of the highly competitive market.
How is AXIS’ current condition?
We arrived in Jakarta, 23 April 2008. Previously, we arrived in Surabaya on February and Bandung on March. We are a GSM operator, we also have 3G license besides 2G. Although we have just started, our networks have reached nationwide. At this moment, we are preparing for Sumatra and will be continued to Pekanbaru and Medan. Furthermore, we are preparing for Central Java cities, such as Solo, Semarang, and Yogyakarta. We will also launch in Bali and Lombok. So, in Indonesia we have 3,500 BTS which reached Java, Sumatera, Bali, and Lombok.
Are you sure that AXIS will succeed?
We know that many people have discussed on AXIS’ slow-moving in its commercial sales. Will AXIS succeed? I am very sure that we will succeed. Our shareholders are Saudi Telecom and Maxis which have high commitment to invest in Indonesia. Both have good experience. They also are market leaders in their base country. Maxis is the number one in Malaysia, whereas Saudi Telecom is the leader in Saudi Arabia. Both have sufficient experience in competing in the market and product.
What strategy do you use in order to be accepted in the market?
We realized that the market is very tight, that is why we appear with a Rp6,000 starter pack which includes Rp6,000 points. Moreover, we offer simple and the best tariff scheme. The tariff offered is Rp60 / minute to AXIS users, Rp60 / SMS to every operator and Rp600 / minute to other operators. Therefore, it will be easier for the customers to understand. By the way, we give 100 MB free until end of May.
Everyone likes free stuffs! So, by the time the program ends, customers will likely leave. How do you cope with that?
Yes, that is right. Hence, we offer free 100 MB internet access. We hope that after they try they will tell their friends about our service. However after this program expires, we will offer other interesting programs. Therefore, consumers would still use AXIS service.
You have tied cooperation with Excelcomindo in network field. Is it only temporary or permanent?
We tied a tower agreement sharing with Excelcomindo. It does not include their sets of equipment, only their towers. We have a good cooperation with XL. This cooperation will be long lasting because this is part of our long term strategy. This cooperation is a quite significant part for us. We are also ready to tie cooperation with other parties as well.
It seems that the main target of AXIS is the young adult segment. Is it true?
Not really. Not because we are using the young adults (in our campaign) we then target that segment only. Our hope is that AXIS will be used by every level. Whether for children, young adults, parents and grown ups, for everyone, especially those who likes data access.
At present, not only you are competing with other GSM operators, but also with CDMA operators. What kind of strategy do you use for penetrating the market?
Principally, every developed network must have good quality. In the first stage, the priority goes to transportation lines such as train, bus, and others. Of course, it extends to other areas in that city. We also hope that the consumers buy at a reasonable price. Consequently, price for the consumers is not a marked up price.
How many existing AXIS centers at this moment?
At this moment AXIS provides its services in Surabaya, Bandung, and Malang. Around 15 AXIS Centers have been opened.
It is quite difficult to maintain loyal subscribers. What kind of strategy do you use?
With the simple and competitive tariff we believe is enough to make the customers loyal.
How about the distributors? Is it difficult to make them loyal?
We have distributors which cover nationally and also locally. Therefore, consumers can easily get AXIS products in stores and cellular phone centers. To maintain the distributors’ loyalty in supporting us, we offer good program for them. As for competition issues with other operators, it is a common thing. It is not something to be surprised of, let alone be afraid of.
You have the 2G and 3G license. How many 2G and 3G BTS do you have?
The number of BTS we have so far is 3,000-3,500 BTS. Five percent of it is 3G. We are waiting 3G to enter a maturing stage. I think 3G is not only for data, but also for voice.
Are you using HSDPA as well?
It is important for the long term. Not many people use internet. The internet penetration in Indonesia is still low. I think many Indonesians access internet on PC, whereas handset usage is still low. You do not really need HSDPA in your cellular phone. There are two factors to bear in mind when penetrating a market. First, is the price of the handset. Second, is the tariff.
How are the users’ responses after you have conducted launchings?
The responses are quite good. The package is simple. They like the tariff that we offer.
In Indonesia there are quite many calling cards, meaning that users buy starter packs only for using the bonuses. After that, they throw the cards away. How do you cope with that?
I think it is not quite proper. It shows no commitment from the users; not committed to their friends and to other relations. I think we need to build a more mature market.
About targets?
In upcoming months we will share our targets. One thing for sure, we target more than one million subscribers this year.