Learning to be Responsible and Responsive Around COVID and ESG
Moving country can be stressful. Relocating to a place where you don’t speak the language is daunting. Changing jobs always presents challenges, especially in a leadership position. But how about doing all three at the same time amid a pandemic? That was what faced Peter Gazik when he took over at Telenor, as he tells the Budapest Business Journal.
He jokes that he officially took over the company on Jan. 1, 2021, “but the first four or five months are not counted because of COVID. Honestly, it has to be said that it was not easy to really grasp the company when I could not see the company,” the CEO admits. The lifting of restrictions and adoption of a hybrid model has helped.
“From June onwards, we are following a three-to-two pattern; we expect our colleagues to show up in the office roughly three days a week. And we are happy to continue operating in this mode.”
Business life has, necessarily, continued. January, for example, saw the 1800- and 900-megahertz mobile license auction. Telenor has also been working on its own projects.
“In September this year, in both the B2B and B2C markets, we made a step towards the home service offering. In terms of the B2C, the household proposition, our enhanced home proposition, will be followed by what we call fixed wireless access next year. With B2B, we are moving towards a fixed mobile cloud convergence offering.”
Gazik was previously CEO at 02 Slovakia. The Telenor boss says a noticeable difference between the markets beyond size is that Slovakia has four leading mobile players, compared to Hungary’s three. Here, it is instead the fixed market with four actors in play.
“What we see here on the fixed side, the aggressiveness of the competition, I witnessed on the mobile side. O2 in Slovakia entered the market as the third company, so it was natural to start as mobile-only and gradually transform into the household offerings,” he explains. “Even though the market dynamics are somewhat different, the position of how to enter and develop are fairly similar.”
Telenor Hungary’s majority owner since July 2018 is the Czech investment fund PPF, with the state of Hungary holding a 25% share through Antenna Hungária since November 2019. Gazik insists that does not impact the way Telenor goes about its business.
“Antenna Hungária is an important local strategic partner. We have been trying to look for all the synergies we can find to enhance our strategy and make sure that we draw on the opportunities that these two companies have. But, back to your question; the transaction has not changed the leadership, the management, the organizational structure and the decision-making in the main strategic initiatives of Telenor Hungary. The management and leadership are in full control of PPF, and Antenna Hungária has a passive position.”
2021 has seen movement in the telecoms market: The ambitious Budapest-based listed IT company 4iG has bought Telenor Montenegro from PPF and has signed to acquire Digi in Hungary, subject to approval. Is more consolidation likely?
“Apart from COVID and the many things that have been happening internally, the last year has also been intense because of the things happening around us, which we follow and reflect on and monitor and evaluate,” Gazik acknowledges.
“Coming from a country where the competition happened between four players, the fact that there is a consolidation happening in Hungary is not necessarily worrying me. In many cases, the mobile-only companies can be somewhat more flexible or agile, can draw maybe more efficiently on what technology is bringing, 5G and the many things that are now starting to dominate the industry,” he explains. “We are still working on us being the one who has the best value offering on the market.”
He insists he has no crystal ball but notes that the industry is becoming more capex heavy, a fact that is Europe-wide rather than Hungary-specific.
“All layers of infrastructure, be it 4G, 5G, potentially 6G and 7G going forward, will require operators to start being innovative in terms of how they finance these investments; how to create synergies and partnerships smartly, maybe also how to consolidate,” he says.
Despite COVID, Telenor Hungary has demonstrated solid business growth. Gazik says his industry was able to prove itself during COVID. “I would say our reliability in these uneasy times is an important part of the puzzle; we proved to be relevant and reliable partners for customers, for businesses, for societies, and lots of activities did shift online.” The macroeconomic picture also helps, of course.
“The genuine growth [of Telenor] in Hungary is something that is naturally feeding on the growth of the economy,” he acknowledges. But he adds that the products and packages it has developed, and is developing, more than played their part too.
Gazik says the industry is moving at a pace that he has not seen since he became involved with it in 2007. One top priority is to invest in his people.
“Whatever happens in the market, I want to make sure that this company has the right people to grasp those opportunities that arise.” There is “a huge war for talent,” he adds, with labor costs “spiraling upwards.” Beyond that, network modernization and 5G rollout “will determine our pace over the next couple of years.”
He says learnings from the first waves are now being implemented as part of “business as usual,” making Telenor “more efficient and lean, being able to serve the customer better because, clearly, customer habits have changed and in many ways will remain changed, regardless of when this pandemic is over.”
Learnings of a different kind have been coming to the fore in the form of ESG. Gazik says he believes it is up to us as individuals to play our part, noting that he has changed: 10 or 15 years ago, he was not separating waste at home. For his kids, on the other hand, it would be unnatural not to see four or five bins at home.
“As much as we as individuals go through this transformation, the same happens in the corporate world,” he says.
Telenor itself benefits from an HQ built by the previous Norwegian owners that was one of the biggest environmentally conscious buildings in Europe when it opened a decade ago. That sets a daily example to staff.
“From September onwards, we have had a dedicated commercial proposition collecting used devices from the whole country. More than 25,000 older electronic devices were collected thanks to this offering. And that is a nice example of how we can tie the natural commercial things we do as a company with very important responsible elements. So, these two are not detached but are rather perceived as natural and this, I believe, is a very good way forward for the company.”
The company is currently reporting according to GRI standards. Will it change its non-financial reports? “ESG will gain importance, and we are working on this in other countries. Adopting it is something we will discuss. We want to be both responsible and responsive.”
This article was first published in the Budapest Business Journal print issue of December 17, 2021.
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