Vodafone Ghana named Yolanda Zoleka Cuba as its new Chief Executive Officer (CEO) on 1st May 2016.
Yolanda joined Vodafone in 2014 and was the Strategy and New Business Director for Vodacom Group prior to her appointment.
Also, she had worked as Executive Director, Strategy & Business Support at South African Breweries Limited (‘SAB’) and as Group CEO of the publicly listed Mvelaphanda Group.
Yolanda was also selected as one of the Young Global Leaders in 2008, an initiative by the World Economic Forum and named as one of the “20 Youngest Power Women in Africa” by Forbes Magazine in 2011.
She is South African and has degrees in Statistics and Accounting from the Universities of Cape Town and KwaZulu-Natal. She is also an alumnus of INSEAD International Executive Programme. Yolanda talks to Head of Citi Business Desk, Vivian Kai Lokko on issues in the telecom industry.
Citi Business News: One year and a month in Ghana, how has it been?
Yolanda Cuba : It’s been good. I’ve learnt a lot, that’s the most important thing, but I have actually learnt to love the country even more.
Citi Business News: Now let’s go straight to your terrain which is the Telecom Industry, we have seen a lot of things happening over the years. For example, this past year or more there have been a lot of challenges that has faced the industry, talk about power challenges, cedi stability and so many things. But let’s start with issues about the power challenges, how difficult was it for you at the time? Of course it’s been a bit better within the last few months but during the most challenging times, in power crisis, how was it for you?
Yolanda Cuba: It was really difficult. In reality all cells actually work on electricity so if there is no electricity it actually interrupts the quality of service that we can provide to our customers and that is the essence of the story. However, more than that, it also impacted on how we allocate our budget. So instead of saying we are going to build more south sites, we ended up having to invest in generators. And then it actually increase our operating cost because now you actually have to run on diesel so the ongoing cost of diesel has been going on even now. Unfortunately you can’t switch of generators because you don’t know when there will be power instability like we saw about a week ago. We actually had our generators luckily so we are not as badly impacted but it always impacts.
Citi Business News: What was with the numbers? How much did you spend roughly or percentage wise out of your total cost of operations in just dealing with the power issues for example last year?
Yolanda Cuba: So eighteen months ago, we spent most probably in the region of about 12-18% of our total cost on power related issues.
Citi Business News: And how has that affected given the best quality service to your consumers because you just said that you had intended to use some of the money to acquire infrastructure but you ended up spending it on power.
Yolanda Cuba: It actually negatively impacted our consumers. Obviously, the first thing is that your consumers cannot charge their phones. So we actually told consumers to get these “Double Decker” phones that they could use for three days at a time so whenever they had power, they had to make sure they charge and that sort of bridges consumption and that actually does not help the industry and does not make the industry more sustainable over the long period of time.
So what we actually did is we had spent a long time actually educating the consumer on how to be confidently connected, how to actually consume throughout the day, and then we see consumption changing somewhat because people actually had to charge when they had power and talk when they have power so those kind of things actually impacted from the consumer perspective. But from our side as well what ended up happening is we couldn’t get generators for all sides at the same time. And everyone was trying to get generators into the country so you actually had to prioritize your load. So obviously that impairs customers negatively from a quality and reliability of service. Because for me at the end of the day, it’s when someone is trying to call an ambulance, when someone is calling a loved one for a favour and the service is not there at the time that is when you really feel the nuisance factor. It’s much better now. I must be honest even with what happened a week ago, I didn’t feel it was severe although it was a national blackout but because we actually had some infrastructure , it actually helped as well.
Citi Business News: Let’s look at the currency issue; do you also face similar challenges like your competitors face with the instability?
Yolanda Cuba: With the instability and depreciation. So in terms of keeping to our expenditure, what I could buy last year is less than what I am buying this year for the same amount of money. So that is effectively how foreign exchange is impacting us. So today that is our biggest problem is that currency depreciation is actually impacting us more around what we can buy for the same amount compared to previously.
Citi Business News: But how are you dealing with that because it looks from outside that you have been able to maneuver over the years with the instability and depreciation.
Yolanda Cuba: You know we are a dynamic organization and industry. We just role with the punches, to be honest. For me the biggest kind of issues is what is it that government could have done, what is it that others could have done so that we learn the lessons from that so that we don’t carry them forward. For me those are the biggest things I am more interested in terms of what are we going to do to ensure that we have a stable currency now that we have learnt the lessons of the past. Because as a business, we actually have some sensitivities that we run. Unfortunately, sometimes what happens is beyond our sensitivity but we actually plan with insensitivity so you say if this goes wrong if that goes wrong how would I actually respond to this? And where would I get the money for this, what would I have to give up here and so on. So from that perspective that’s how we have actually managed to handle it. Has it been difficult? Absolutely.
Citi Business News: Now we have seen a government which is pro-business, which is open to take advice from the industry. And you earlier said that you want to see what government will do or could have done to deal with some of these challenges. In your opinion, what would you suggest they do to deal with some of these challenges that are clearly having a negative toll on your operations?
Yolanda Cuba: I think there are a couple of things. For me the first one is work more with industry in a more collaborative manner in order to actually ensure that the demand side of the formula is actually appropriate. Because sometimes we are like here is the supply side you see what you do, however, we can see the growth in our businesses, we can see how people are migrating from basic services to more sophisticated services. So all those services actually are impacting consumption of electricity, water and all basic services including health care. So how can government actually tap into that to actually ensure that the demand formula is actually balanced? We will be more than willing for example to help with that.
The second issue is around for example how government comes up with policies. Is there a way in which we can work more closely together to say actually our objective as a country as Ghana is the following? What is the best way to get us there? Obviously all of us will have different opinions and government is the final decision maker on how we get there. However, for me it is more about certainties around those policies that is really most important. Because whether it is a bad or good policy, if it is consistent, you actually can work within it. The chopping and changing and introducing new elements every so often, that becomes somewhat of a challenge.
Citi Business News: The industry set up the telecom chamber, has it been useful in helping shape government’s policies or even pushing your agenda so far?
Yolanda Cuba: It’s been really helpful to be honest with you. For me when I walked in I became the Chairman that is the first thing that happened. I am not sure how that happened but it happened and it’s been really useful because it allows us as an industry to actually have a common box. we actually gain consensus first before it goes to government so even with government the kind of discussions we are having with the regulators are actually from a consolidated perspective and that is always useful to actually get that consolidated perspective so that government also understands that I am dealing with one voice is not three or ten different voices trying to lobby me, trying to give me their perspective or each one telling you how best their solution is and so on. So from that perspective we have made significant in rolls in terms of making sure some of the policy issues have moved forward and we are looking to more preparation with the current government as well.
Citi Business News: People who are not really happy with the industry for example believe that you are not taxed enough, you should be taxed more. Would you say you are overtaxed or not taxed at all?
Yolanda Cuba: Okay from our perspective actually it is an industry that is quite heavily taxed. We are taxed on top line, about three or four taxes that are based on top line. So before you even minus your expenses, all on the top line, it actually goes off. The second thing is that you then actually get taxed on your bottom line like everyone else so that one is not an issue for me. You are in the country you are making profit from the country, you have to contribute to society and government in the country so for me there are issues around there that are not really an issue but there are specific taxes that are there that I do not think are necessarily useful.
Citi Business News: Like which ones would you say, why do we have this kind of tax here?
Yolanda Cuba: So for example here we don’t call it tax, taxes for me is just using a service. So it’s like saying if you drink water, I’m going to tax you. It doesn’t make sense and that is my biggest one. I mean the stabilization tax which is the bottom line tax is one of the taxes that are in the country which was meant to serve this particular purpose.
Citi Business News: That is the tax most of you have been calling for government to get rid of because it was supposed to run for just a couple of months. So you believe that tax should be gotten rid of soon?
Yolanda Cuba: Yes that one serves no purpose to be honest, it was for a specific purpose and that purpose has come and gone it should go away. And also these are things around what you say and what you do. So if what you say today, as government you say I’m going to keep this for six months and then keep if for two years, next time you introduce something, I will look at you with a bit of suspicion where as in the beginning I was willing to engage on it and actually understand it is a short term issue to help the country. Now when you come with another tax it’s a bit of a problem. And also I mean there are other things that are happening in the industry. I will tell you in the last government the introduction of the ICH, which is the Interconnect Clearing House. Today as mobile operators we have bilateral agreements between each other and we interconnect with each other. And we actually settle with each other every day around the minutes that you use from this network to that network and so on, and then the proposal was actually to interpose a company in-between that will do that. But for me it is a system that already works. Why actually take something that works and actually break it up and then put in an entity in there for example that would make money and that would require a return on capital because it would be owned by capital providers and you know cost the customer more ultimately? Why would we do that? So those are the kind of things to me that I always look at and say are they useful, are they not useful? So yes that is what we talking about about policy consistency and also intentional around policy.
Citi Business News: Ok so you were excited when the ICH was put on hold when the new government came in.
Yolanda Cuba: Absolutely. I am one of the people who spoke about it last year, I got into trouble and I am happy it goes away. If it goes away forever I will be really happy because I genuinely do not believe it will serve an extra customer it help us get more connectivity to the rural areas and so on. Once people are starting to talk about the fundamental issues, the fundamental problems and how we actually solve the big issues, then that’s where I will actually want to engage more. The kind of issues where we trying to deal with something that already works instead of dealing with the plethora of things that don’t work, that is where I actually have some challenges.
Citi Business News: Brings us to the issues of mobile interoperability which a couple of months ago we saw the Central Bank trying to do something which did not work out. Came back to the same question about whether Telecom operators cannot do things on their own or cannot push for their own agenda. What’s your reaction to seeing all the discussions around it and been part of the whole discussion but not really been given the opportunity to deal with it in the first place?
Yolanda Cuba: I think interoperability is the right thing. Its mobile money and around mobile money, money must act like money. When I pass it on to you, it doesn’t all of a sudden have a red color or green color so I shouldn’t be restricted around how I move money. So from that perspective I am all in support for interoperability. It’s the how it is executed that actually is an issue between banks and operators. Today, operators are actually interoperable as we talk.
Citi Business News: Lets go to competition proper in the telecom industry where we heard a couple of months ago that Airtel and Tigo announcing that they intend to merge and start a new marriage together, Currently you are number two in terms of who is in charge of the industry. But there are a lot of people who believe or when you speak to some telecom analysts that when Tigo and Airtel merge, looking at the numbers and other factors, they are likely to overtake you. But before we go to that, how did you take this merger news?
Yolanda Cuba: I think it is a great thing. We have been actually saying that the industry is too fragmented, too many players in the market. I think it is a fantastic thing to happen for the sustainability of the Telco industry in Ghana. We would like to see more consolidation to be honest. I think this is not enough, this is just the start so we are looking forward to actually more consolidation.
Citi Business News: Would you consider a consolidation? We are seeing the likes of Espresso, Glo struggling in the system, would you consider?
Yolanda Cuba: Everything has a price. At the right price I will buy anything that makes sense.
Citi Business News: So if they are offering you a good price and it makes strategic sense for the business, Vodafone will acquire another one, wont you?
Yolanda Cuba: Absolutely. It would only make business sense for us to.
Citi Business News: But aren’t you worried with this merger even though we have spoken about it over the years that Ghana is quite a small country. At twenty five million we are seeing six telecom operators, it doesn’t make sense. But aren’t you worried about where you will be placed after this merger?
Yolanda Cuba: So if you look at the hard numbers today, an arithmetic total that will sum up of Tigo subscribers are and Airtel subscribers are actually put them just above 10million. That means they will…in terms of number of customers. Remember we count number of customers definitely. So I don’t know how they count theirs but from that perspective they will be number two. However, in term so the report that they actually took out, their revenue combined will be around three hundred million dollars. Our revenue is well beyond three hundred billion dollars today. so that just gives you a sense that in terms of revenue market share which is just what we measure in the revenue market space, which is what we measure in the Telco space quite pervasively, then we will still remain at number two for a while.
Citi Business News: What would you say to some of your customers who are considering moving to the merging companies?
Yolanda Cuba: I think the first thing is you actually consider your network quality. We have consistently invested in our network, we have consistently invested in our customer service and our consumers are actually recognizing that. Because when we actually do our net promoter score which is basically how consumers feel about you, when we look at our score they are seventeen points between us and our next competitor. So from that perspective our consumers are actually telling us we like how you service us a s a company.
I would also look at how responsive is the business to the queries that I have. How responsive is it to some of the issues that I have, etc. So those kinds of things for me are really important to me. So for me it is important that you actually have that kind of relationship with your customers where actually they are not far from you so those are some of the things that you look at, is it a number on the chart or is it the quality of service that I am after.
Citi Business News. Okay so let’s look at 4G MTN has 4G there’s another available spectrum out there but will we see you roll out 4G any time soon?
Yolanda Cuba: I think at some point we will roll out 4G the question is around, is the price at which it’s being offered with the current slot that’s available a market related and is it a fair price to pay for, we do not believe so in fact MTN when they paid the price they actually said it wasn’t a market related price.
Citi Business News:So if government pushes the price down we will see you acquire it, which amount will you be willing to spend?
Yolanda Cuba :I’ve been very direct and this is the point where I will have to say no comment.
Citi Business News: I guess that means you want to see it drop very low but let’s come to the issue with data penetration since we are talking about 4G, I can say that there’s quite a bit of growth but people expect us to have the numbers do better than we are seeing, what do you think the likes of you can do to push data penetration to the better figures?
Yolanda Cuba : So there’s a couple of things that data penetration is dependent on the first is how pervasive your network is the second thing is the kind of handsets that people have. A lot of people still have 2G handsets even though we have 3 G today so while MTN might have acquired a lot of people have 3G handsets and they are not actually getting the experience and that’s what we are actually seeing around and then the last element is how we encourage consumption, so how we encourage consumption comes in many forms like what kind of things we put on our platform in terms of more content play and so on or it might be how you actually provide micro bundles for people who are starting to just have a flare for what data can actually give them because a lot of people do not have that.
Citi Business News: And then let’s talk about something that I know you’re very passionate about, financial inclusion using telecom as your backbone, a lot of people are trying for us to have better in roads into this but it appears it’s a slow journey, how can we fast track it as a country?
Yolanda Cuba : I think the biggest way to actually fast tract it is actually getting the supply side right so if for example government decided that it will do all its payments through mobile money it would change everything overnight so for me those are the kind of supply sides we need , if your employer says I will pay you through mobile money it will automatically create the eco system that works as it is now you have to take money from your bank account into your mobile money wallet so it acts like a wallet rather than mobile money so it’s not e money yet because it has to be moved from one platform to the other however the day when everything is deposited then you would naturally transact on the platform that you already have as well.
Citi Business News: But some say that you are not ready for the huge figures that you are calling for if you look at the increasing numbers in mobile money fraud , so are you ready for these huge numbers you are asking for?
Yolanda Cuba :Absolutely because we have we scalable businesses we build IT infrastructure , we build network capability in order to actually serve us exactly in that point so if I look at Kenya Safaricom which is our sister company which controls a lot of M-Pesa money, it’s a scalable business model and we do not have to build another branch in order to serve another hundred thousand people, we actually have to tweak something on our IT business structure and in most cases we actually have to do nothing at all .
Citi Business News: Okay so you are ready for this. Let’s start ending the interview with one or two other issues that we have seen for example offloading some of your assets like the telecom university, why would you want to do that?
Yolanda Cuba : Well actually we have said that there are properties that Vodafone acquired as part of the sale in 2008 and 2009 and we realized that we actually do not need for operational reasons though as Vodafone we paid for it as a company we really do not need it and we said to government we are more than happy to hand theses over back to you and its 18 prime land, property and residential areas that we are giving to government and we are waiting for finalization on that.
Citi Business News :So apart from the university what other assets are you offloading?
Yolanda Cuba :We have got a lodge which is fully fledged and apart from that we have got apartments and houses, we also have vacant lands in some areas that we actually want to off load as well.
Citi Business News : And finally what are your expectations for 2017?
Yolanda Cuba :I’m hoping for better growth, better engagement with government and for synergy between private sector and government as well so that we can work towards a common goal that’s what I actually want.
Citi Business News : And your general projection for the sector do you see it growing or the same business as usual?
Yolanda Cuba : As I said we are all in it together and because our businesses all have flexible models we actually tend to grow even in the bad times but having said that it is never guaranteed but I’m still expecting growth in the sector, I still think its underpenetrated as you said in relation to data and all of us are driving that really hard and to get more coverage as well, remember coverage is still the issue in Ghana today so there’s a lot of things to still play for in the country.