Following are excerpts from a CNBC interview with Jean-Yves Charlier, VEON CEO and CNBC's Akiko Fujita from the World Economic Forum 2018.
AF: Hi there Nancy, we're going to shift our attention here a bit, going from geopolitics to some of the changes we've seen in the telco space. Specifically, we're joined by Jean-Yves Charlier, who is the CEO of VEON, joining me here on set. Welcome.
JC: Good morning.
AF: So, we have seen huge disruption in the space, partly because of the intense competition coming from the traditional telcos, but also, these OTT services, whether we're talking about Apple's FaceTime, or Google's Hangout. When you look at the disruption that we've seen, hasn't it been a good thing, a net positive, for a traditional company like VEON?
JC: It's been a difficult disruption, in fact, for the whole of the industry, and even for companies such as ourselves, operating in emerging markets. And what we've seen in this disruption is that telecoms has become more and more a commodity, for most consumers across the world, and the disruption has meant that the industry that used to be a high-growth industry has gone to being a single-digit growth industry. So, fundamentally, the telecom industry needs to reinvent itself, and that's the transformation that we've embarked on at VEON. And it's a digital transformation, because there are huge opportunities of connecting more of the world's population to the internet, but offering, also, a better digital experience-,
JC: And, finally, it's all about creating new services, and new platforms, for consumers around the world.
AF: Mm. That transformation really went in to full gear last year, when you rebranded to VEON. Since then, you've offered up several services, to compete with some of the big tech companies, as well. Is the idea here to go head to head with them? Or is there a value-add that a traditional company can bring to the market, that perhaps the Googles and Facebooks can't?
JC: Absolutely, and we're doing, fundamentally, two things.
JC: The first thing that we're doing is that we're digitalizing our business. We believe that the consumer experience needs to be an online experience, right? So, you can top up with two clicks on your app, you can access customer service, you can change your subscription plan online. So, fundamentally, that's about digitalizing our core telecom business. Making the experience an Amazon type of experience. On the other side, we need to bring new services, and we're creating platforms to do that, we're creating a marketplace. And there, we're partnering with some of the biggest brands in the world to do that. So, we're not only competing, but we're also partnering, and that's part of this new digital ecosystem.
AF: Mm. What are some of the changes that's really stood out to you, since you've embarked on this, especially in the emerging markets you operate in?
JC: Well, the changes that we've seen is that we have still opportunities, first and foremost, to connect more people to the internet. Today, VEON serves about 250 million consumers around the world, but, in the markets where we operate, 40% of the population is still not connected to the internet. 60% of the population, in the markets where we operate, are unbanked. And this really represents, you know, significant opportunity. Bringing the internet to more people, and offering more digital services.
AF: Mm. You mentioned you're still trying to bring 4G to markets, but, of course, the next frontier here is 5G. You know, there's certainly a lot of competition in that space. It looks like, coming with the Olympics, the 5G will be the first launch, kind of, the showcase, globally. Do you get a sense that-, that you are a bit behind on that, given just where especially some of the Asian tech companies have moved forward on that?
JC: We're certainly not behind as a company. Our markets are fundamentally behind. We're still deploying 3G and 4G in many markets where we operate today. But 5G is going to represent some fantastic new opportunities, in terms of autonomous driving, in terms of telehealth, remote education, for example. These are opportunities that could help these emerging market economies leapfrog in to digital economies.
AF: Mm. That's really a unique test case, because we often think about 5G, and the speeds that come with it, how that means-, what that means for connected devices, as well as autonomous cars, but you're dealing with some of these areas that are yet to be connected.
AF: So, how significant is that leap? I mean, you're going from areas that are still, perhaps, on 2G. You go from that to 5G. You talk about education as one application. What are some areas that you think could really be transformed, as a result?
JC: Well, I think that it's still about connecting, as I said, more of the population to the internet. That still represents, for us, real opportunity. But, beyond that, it's creating new platforms, new services, to allow these consumers to really participate in the digital economy. In certain areas, such as education, I was talking about, marketplaces, ultimately, new areas of education. We think that those areas represent, you know, fundamental opportunities. And the network is going to be more relevant than ever before.
AF: And how many years do you think we are away from commercial use, or commercial launch in 5G?
JC: In emerging markets, I think we're still about five years away from really seeing, you know, super cities being built in the main capitals where we operate, and probably ten years away from really seeing some of these use cases, and some of these applications, going to more of the remote areas of these countries.
AF: Okay, we'll continue to watch this space. Great to have you on today-,
JC: Thank you.
AF: Jean-Yves Charlier, joining us from VEON. Nancy, we'll toss it back to you.