Interview: Cell C CEO on blogs, social media and the end of cellphone calls

Lars Reichelt, CEO of Cell C, announced some time ago a strong push by the mobile operator into innovation and social media. The smallest of the mobile operators, behind Vodacom and MTN, Cell C has caused a recent storm by launching a new advertising campaign, straddling both traditional and social media, involving popular comedian Trevor Noah.

The campaign has attracted both praise and criticism, and quite an outburst in the blogosphere in particular. Reichelt must be one of the few CEOs in the world who has joined the fray, personally commenting on various articles on this site too, and even humorously responding “Yes, it’s me” after reading a negative article on Memeburn.

We sat down to speak with Reichelt about his company’s bold new strategy, the controversial advertising campaign, the future of mobile technology and the end of cellphone calls.

MB: Tell us about the new marketing campaign involving Trevor Noah and the full page newspaper apology? What has the last few weeks been like?

LR: It’s been incredibly exciting. Some people are lambasting us; other people think it’s great. The truth is somewhere in the middle. We can’t go out and say we are great, because we wouldn’t be right. Is Trevor right when he criticises us? Yes, he is. These are the things that people say privately. We’re hard to talk to, it’s all corporate speak. People see us as a corporate behemoth, hiding behind walls. We need to recognise there are things we have done we can’t be proud of, but we are telling people we need to change, and we’re putting the money in. In the next 90-120 days, there will be some significant changes.

MB: People are asking how they can believe you. They are complaining that your letter of apology to Trevor and consumers was “fake” because your apology to Trevor was stage-managed.

LR: I’m not sure why people are criticising the campaign for being “a setup”? The point is we needed to sensitise people to the point that it is [poor service from mobile operators] an issue for us. The point is to create a platform where people can start discussing about how good or bad mobile service is in this country. This is not about deceiving anyone… it’s about raising the issue for public discussion.

We are giving people a platform to say “You know what, Cell C? This is crap”. We are inviting people very openly and consciously into this dialogue. We are raising people out of this apathy. We are saying we want to change and there is huge investment in the change.

I’ve read the criticism from bloggers, but they must know we are making changes. We are investing in 4GS, we are working on our billing. This is how we create discussion. What we have now is a very healthy debate. Some people love it and hate it, but people have started talking about it.

How difficult is it to tell your mobile service provider about your dropped call? About as possible as finding a nice taxman. We are creating that platform. Cell C investors have been investing for nine years and not seen a cent of return. They are giving us a second chance and there won’t be a third one. This is not another fluffy marketing play to make something look better and put “lipstick on a pig.” It’s time to become a different animal.

MB: Why Trevor Noah?

LR: Trevor has a huge appeal, across everything. He’s a guy who picks up the hot issues. He has no problem speaking his mind. He does it in a way that is pointed, but acceptable at the same time. If he’s the face, then people are going to start engaging and it will create a feedback loop.

MB: You mention bloggers criticism? Tell us about that?

LR: Some of it has been acidic. When I come home at night I check what is happening in the blogosphere. Why is that relevant? Well it’s a reality that is out there. A segment of our customers live in the blogosphere. These are the most exciting times in the 18 years of me being in this business. Mobile is becoming incredibly fast. The cloud is coming into its own. This country has first world and third world all mixed up. Think about it. Steenberg to Khayelitsha is only about 5kms.

Reading some of the blogs, some of the stuff people write, I don’t get. It seems like folks who have found a medium to get rid of their anger, some sort of anger management. Other folks are extremely sensible and spend time and see the blogosphere as an outlet for good journalism.

MB: What’s the hardest thing about running a mobile service in South Africa?

LR: Complacency. There is something in the local mentality that makes innovation not very high on the list of things that matter. If you want to compete as a smaller player, innovation is crucial. The reason for being third is to innovate. If you’re not, then you not doing your job as a smaller player.
I worry that compliance is valued higher than innovation.

People look at you strangely when you say you want to change things. The other point is that there is a mentality that says it’s good to be with a winner. Willingness of people to step out on a limb is less pronounced here than in other markets.

The biggest problem is that it’s harder to build a tower here than it is in Zurich. Why? Is it the law? Is it regulatory stuff? People say they’ll help you, but then nothing happens. There are 500 Environmental Impact Assessment’s pending. So it’s difficult. This is a big issue that no-one is raising.

MB: What are the positive aspects of being a smaller operator?

LR: It can be a lot of fun. The market hasn’t seen a lot of competition and we’re trying to raise the bar, to be more competitive. And it’s working. The big guys are responding to some of the moves that we are making. This country is so incredible. The possibilities are amazing. Just being here is exciting. South Africa can organise anything. Take a look at the World Cup. It was German precision with African joie de vivre.

MB: Let’s talk tech. Which Twitter clients do you have on your iPhone?

LR: Twitteriffic and official Twitter on my iPhone 4. (Lars brought two iPhones to the interview, a 3GS and an iPhone 4).

MB: Blackberry or iPhone?

LR: I use both, but given my eyesight, the iPhone is better for me.

MB: Do you own an iPad? How would you improve it?

LR: Yes I own one. It’s an absolute killer product. It totally defines a new category. I would be happier if it was easier to do presentations with it. As a consumptive device it’s stunning. It’s amazing what you can do in healthcare, government, education with it… for example, I downloaded the periodic table of elements on my iPad. I remember how I struggled at school with it and it didn’t make any sense — now you look at it and touch an element and it comes to life.

MB: Do you own a Kindle?

LR: Yes. Ever since I’ve had an iPad, I haven’t touched it though.

MB: How is the social media strategy going?

LR: Cell C used to target a certain segment of customers who didn’t do social media. The real growth has happened in social media in last 18 months. If you are a mobile operator you want to understand your customers’ way of life, to improve lifestyle and improve livelihood. If we want to understand how people live, then we need to be in the social media space. For us, it’s part experiment, part necessity and third part learning. Are we as good as the crowd at finding out what people are saying? No. But we need to raise the debate out of the apathy. We want to change. Will we get it right? Some things we’ll get right and some things we’ll get horribly wrong.

MB: Tell us about the new brand?

LR: We’re trying to do things differently. We are not shy to make one or two ballsy moves. With some of those we may fall flat on our face. We are small, relevant and close to this country. Why do we have the SA colours in our brand identity? Because we are in this country and we need to succeed in this country. Important question is “Are you relevant in South Africa? Are you relevant in Khayalitsha, are you relevant in Camps Bay?” How do we do that? Not by a usual corporate campaign, but rather be a little like our consumers are. We’ve been in stealth for the nine years, but now we’re ready to pounce.

MB: In the future, will all calls be internet-based?

LR: There are some operators in Europe who think they will turn off GSM by 2014. They will literally turn it off. When will it happen here? It’s hard to tell. Does it make sense? If you can provide better service, sure. When was the death of the LP? Who listens to records today?

MB: Will Cell C be bringing out the iPhone here?

LR: Well, I already have one so I don’t care (laughs). And I’m not going to share it (laughs). Apple is a company that has global priorities… I don’t know to what extent Cell C can get into those priorities. I don’t try to predict the future. But I can see that touch screen is going to be cheap and everywhere. Wait until these kind of smart phones are around $75. Then imagine the possibilities.

MB: What’s the future of mobile service providers?

LR: We’ve been doing voice and SMS, if you look at the significant revenues. Some say the future of the operator is to just be a pipe for data. That’s not necessarily a bad thing? If you think about it, commercial banks are just commercial pipes in many ways. Think about education, government, think about health care… they affect every aspect of life. Everything becomes IP. How do you link IP? You do it wirelessly.

When you need connectivity, identity authentication, billing – then you will go through a mobile operator. In the future mobile operators will be enablers.