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Striving for Double Digit Growth

The latest Telkom’s annual report mentions revenue of around Rp. 80 trillion, with profitability of Rp. 16 trillion. The figure apparently excellent. Therefore, we all, as Telkom’s employee are ecstatic.

Despite the happiness, Witel are struggling to get positive growth of revenue. It’s too far to think about double digit, perhaps it’s only imagination. Over months, all Witel strive hard to get positive growth, eventhough just 1 until 5 percent. Even, some Witel suffers negative from month to month.

Actually, excellent figure of the report was contributed by subsidiary, Telkomsel. Telkom itself was not so good. Eventhough, it still got profit along years. But basically, Witel, as a core part of Telkom has suffer for some years.

The important question is : why Witel was struggling hard, just to get positive growth of revenue? The following are the answer, off course from my point of view.

Background

Witel suffer from negative growth of revenue, really hard to get positive growth, eventhough only 1 percent

Objective

Analysing the root cause and propose the solution for the long run

Methode

I deliberately use the qualitative data, instead of quantitative. It aims to avoid misconception, especially from Witels. It’s also to simplify this article, so everyone can enjoy to reading.

Strategic Problems

From my analysis, the following are the 3 root causes of negative growth

a.      a. Infrastructure/ Alat Produksi/Alpro

Most of Alpro were built in around 1990s. It was twenty years old, or even more. Over years Telkom has forget to preserve, because of many things. Even, its maintenance has been delegated to third party (POJ). From this facts, we can imagine, how does look like? The Alpro maybe still good for voice service, but not for data. Customers will get miserable experiences, in term of stability, reliability and many more.
Even farther, nowadays is the era of broadband. It’s LTE era. Customers need extra speed for their internet. Single digit Mbps is not enough anymore. They need double digit Mbps. So, how can we deliver such a speed with cooper or MSAN technology?

b.      b. Overpaid

Internet price was getting lower over last years. It was contributed by competition, mainly in cellular industry. From this facts, Telkom has plunged its internet price until less than a half. New customers can get 1 Mbps with around Rp. 100 thousand per month.

Unfortunately, million existing customers has paid double, or even triple every month, for many years. No additional features have been delivered to them.

We do not know exactly, why do they still join with us. But I am sure, they will immediately move to competitors when competitors come in.

c.       c. The Service

What do you think about, if I ask you about service? I brave bet, you will answer “customer service representative – CSR”. It’s not wrong, but I suppose, CSR, Plasa Telkom dan 147 will contribute no more than 25%. Why? Because customers visit them only for a while.

But, the most important thing is service level guarantie (SLG). How can we solve a requests, faults or troubles on time, correctly, precisely. No repeat complaints, no repeat faults. Absolutely satisfied.

Strategic Solutions

Understanding the strategic problem is very important. Misperception will lead to wrong actions. But, understanding is not enough. We have to design proper solution to fix the problems.

I believe many senior leaders have understand the strategic problems. And understand the strategic solutions as well.

Regrettably, they do not have enough bravery to fix the problems, because of many things, among others is huge cost or investment, which has to be allocated.

It is time to brave, it is time to implement, for the future of Telkom.

a.      a. Move to FTTH

FTTH has become discourse since 2009, then pilot in 2011. But, since then, the project has been suspended. By 2013, the project was upheld. Sadly, changed to FTTC in 2014. Recently, 2015, new board of directors lift up the FTTH project, with ambitious target of 3 million connected home.

FTTH is the right technology. The technology becomes mainstream across the world. No continent in this world without FTTH. Accompanied with LTE, FTTH would become internet backbone worldwide for some decades.

Senior leaders must believe in. No future without FTTH. Whatever the cost, Telkom should allocate for the technology.

b.      b. Massive upgrade

As explained before, we have million overpaid customers. That’s mean, we get more with less service. Actually, this fact is contrary to our jorgan, 'more for less'. We can not maintain this condition anymore. Because we will suffer huge churn upcoming month. So, as soon as possible, We have to give more service with less price, at least relevan price.

One thing that can be done is upgrade. All overpaid customers should be upgraded with no additional charge. The spending maybe huge, but we have to see it as an investment, not as a cost.

Especially for FTTH’s customers, we can upgrade their speed, up to 100 Mbps. But for MSAN’s customers, it can be difficult. Because maximum speed is about 5 Mbps. Alternatively, we can give them other service with no additional charge. For example: free useetv, free a camera, free melon, etc.

c.       c. Operational Excellent

We have to be aware, do not be ashamed to acknowledge. Many things have been ignored for many years. The Quality did not be seen as an important things. We often focus on sales only.
Please take a moment to see the following:
  1. a)      Q, a parameter for number of complaints
  2. b)      MTTI and MTTR, a parameter for duration for solving a problem or request
  3. c)       GAUL, a parameter for number of repeat complaints
  4. d)      CSLI, a measurement for customer satisfaction
  5. e)      SOP (standard operation procedure) for alpro maintenance

All of these are simple things, but the impact can be a strategic thing. Unfortunately, these things only be managed by low level management. So, it’s time to ‘back to basic’. Quality is a must.

Conclusion

Striving for double digit growth can not be achieved by pushing sales over time, but discard the existing customers. Because new sales always generate low ARPU. The double digit growth should be pursued by maintaining old customers which is mostly high ARPU. We are sure that maintaining existing customers will generate new sales as well.

Three keys to maintain existing customers are: First, move to newest technology, namely FTTH. Second, give them more value than price, by an upgrade program and more added features. Third, service excellent, deliver service more than their expectation, mainly on fault handling.

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