Head of VimpelCom — RBC: "I am not a temporary CEO"

Kjell Morten Johnsen, who had been appointed as CEO of VimpelCom in September, gave an interview to RBC, talking about new pricing principles, how long he would work on that position and what reforms would be needed on the telecom market.  
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"I personally will recommend a candidate"

- Your appointment "VimpelCom" general director originally declared as temporary. How long do you plan to stay in that chair?

- First of all - I'm CEO of "VimpelCom" without any reservations such as "temporary". And legally and practically. I am based in Russia, led all strategic and operational processes, and fully responsible for our business in one of the most important markets for the company, and to keep the position in Vimpelsom Ltd. Our strategy remains unchanged, as a part of VimpelCom, we strive to change the telecommunications industry, didzhitalizirovat how we operate and how our clients use of services.

One of my tasks in this role, as is the search for the general director. We do not know for certain how long these searches. I can say for sure - if it will take time, we will not be in a hurry.

- Is it true that the candidate for the post of director general is looked from the "internal reserves» VimpelCom? For example, called the candidacy of Mikhail Gerchuk(Currently holds the position of "Eurasia" the general director of the region) and Anton Kudryashov (Director of Development and Asset Management).

- I would not like to comment on the director general of the selection process. We started with a large list of candidates. The main thing - is to find the best person for this position. Regardless of where he now works.

- For who will have the casting vote on the candidacy of a permanent director general? Will it be the largest shareholder of the holding - "Alfa Group"?

- I personally would recommend the candidate for the post of head of the Russian "VimpelCom". It's my job as head of the Major Markets region. In addition, the nominee must approve VimpelCom head Jean-Yves Charlier, the Remuneration Committee will be involved in the process.

- If the "case of Mikhail Slobodina" will be reviewed and it will remove the charges if you allow him to return to the company?

- I do not know absolutely nothing about the case, it has no relation to any of VimpelCom, nor to the Russian "daughter". He left the office, and the company has accepted the resignation. I am confident that as head of "VimpelCom & raquo; he will not return.

- Do you keep in touch with Mikhail Slobodin? if he gives you tips on "VimpelCom" management?

- I do not need to consult with former employees to business processes. This is an internal matter of the company.

- You have been manager of the Norwegian Telenor, in the past, a major shareholder of VimpelCom, and participated in conflict with the other shareholder - "Alfa Group". How do you work with the "Alpha" as a hired manager VimpelCom?

- In this position I was invited CEO VimpelCom Jean-Yves Charlier, with the approval of the board. My relationship with the "Alpha" has always been professional. The history of our past relationship has helped us get to know each other better. Now we have absolutely no issues with any of the major shareholders.

- Coming Telenor output from the shareholders, according to you, such as the impact on the company?

- Because I'm manager of the company, I do not have an opinion about what they do or do not do the shareholders. It is their own business.

- You were a member of the Board of Directors of Russian "VimpelCom" 2007-2010 years, since did not participate in the management of the company. In what condition did you find the company now?

- Firstly, I followed the company until the summer of 2015, while he was a member of the Supervisory Board Vimpelsom. "VimpelCom" - a significant part of the holding, the company is a valued member of the largest digital-transformation. We want to be more involved in the digital lives of our customers, rather than just providing the connection. Look at what is happening around: the mobile phone an even greater part of our lives. We have already done a lot in order to ensure easy connection of users, but the industry is not enough to work in the service part. We quickly launched a 4G network, we want to be leaders in technological development, and simplify our operating model. It is now required by each operator, and not too different from what I did at their previous positions. We do not expect major changes in strategy compared to the one taken in August last year.

- Mikhail Slobodin was extravagant head, very active in the public field. What is your view on thismanner of head of the company own?

- We want to be open now, this applies not only to the CEO level managers. But I have two reasons to be less active. I do not plan to be the CEO of "VimpelCom" for a long time. When we hire a new CEO, he is likely to be more active in the public field. Secondly, it is my personal choice - to be less public.

- Large "VimpelCom" transaction on hold until the appointment of a new head, such as the sale of towers to house telecommunications equipment?

- VimpelCom have a very pragmatic approach to the issue of the sale of the towers. This concerns not only the Russian asset. If we understand that, in respect of any asset is, more efficient operating model, we will implement it. Such decisions do not depend on who is sitting in the chair of the General Director.

- Are you personally ready to take responsibility for such a big deal, as the interim head of the company?

- Absolutely. I make decisions every day. I'm not going to leave the company, I plan to be an active chairman of the board of directors "VimpelCom", when we appoint Mr.ovogo director general.

- Tell us about the first results of transformation in "VimpelCom"? For example, how many were able to save on staff or outsource operations?

- I will not name specific figures. In summary - we look at how our operating model should work in the future. We have a very pragmatic approach to this issue and not to run the company as in 2010. Focus should be on how to maintain an effective level of competencies needed in the future.

"In Russia, people are more open"

- You just Mikhail Slobodin, do not sit on the eighth floor, where traditionally housed Management "VimpelCom", and in open-space with ordinary employees?

- Yes. When I headed Telenor Serbia, we, too, was open-space, 50 people were there. When I headed Telenor operations in Europe, the top management together with me and was located in the open-space. I believe in this model, and I want all departments reporting to me so worked. This shows that you do not need to sit in a big office to have the authority. I think every leader should lifeopen.

Our transformation - this including changing of how the whole company, each employee. We have about 3 thousand. People working remotely, be the duty of every day in the office do not have. And in 2017 this possibility will have almost all of our employees. This is a complete restructuring of the model of relations, monitoring and reporting system, which is necessary to start, of course, with you.

- As to such a vision are other top managers of "VimpelCom"? They are willing to share with open-space you?

- Some of them have already moved into the open space to the other employees. There is in this, and the practical side: we update the different parts of the building, the team moved, I have a neighbor, and it strengthens the horizontal links. Transfer occurs in several steps, not a few days. The same thing we do, and at the headquarters in Amsterdam. When I joined the team, I was offered a personal office, I said, guys, I'm ready to become the first top manager, who is sitting in the open-space, just tell me where to sit.

- How did you first meet with the staff of "VimpelCom"? How do theyembraced rapid change of leadership?

- In such a situation it is important to be as open and understandable, because people have a right to know what is happening in the company. I arrived in Moscow as soon as he could. The next morning, met with the top management of "VimpelCom". I note that they are immediately redistributed responsibility so that the processes in the company went on as usual. I told them that we will take any decisions to be taken. We conduct business continuously.

The next day we had a meeting with all the staff, the people in the regions participated in it on video - all who wanted could take part in this meeting. I spent half an hour with them, starting with the story itself, about 40 minutes lasted answers to any questions. I think it was very necessary, because people feel that things are moving fast, and needed a landmark and clarity. We tried to do everything possible to explain as it is now to be built business processes.

- What did they ask you?

- About all that, what you are asking me is whether to changeI have a strategy and management. Questions were asked about me, about my relations with Russia, I'm going to move here. And I'm glad of it. I remember when I led the other companies earlier in a similar situation to me there were only two or three questions. By comparison, in Russia people are more open, more willing to ask questions.

- Which one of the vice-presidents you perceive as the right hand? Who brings you up to speed?

- I have met them before, when he was appointed to the headquarters. I mean, I knew it, it was good. They are all equal, everyone has their own area of ​​responsibility and authority.

Arriving at our Moscow headquarters, I also support communication with ordinary employees. Sometimes dinner in the corporate dining, interested in how people at all levels of the company see it work. It helps to look at the situation from several angles, sometimes even to get new ideas.

"The security situation around the world is quite complicated"

- Have you met with representatives of competing operators, the Ministry of Communications?

- Yes, of course, I was in the ministry togetherwith the other CEO, discussed industry trends of the telecommunications industry. The people with whom I met there, with most of them I was previously familiar.

- You are involved in the major issues that are being discussed in the market, the so-called law of Spring, it will be executed? Another big topic - interconnect, settlements between operators. whether these issues are discussed with the CEO in the Ministry?

- I can tell you about his vision. The security situation around the world is quite complicated. This is true for many regions. In Europe, we have also seen a huge problem a year ago. Many countries pay special attention to issues related to security. The fact that Russia, too, is doing fine. We understand that. Our goal as a company - to support these efforts. But we hope that there will be an open dialogue on how to implement these measures in practice most effectively for the security, development of the industry and the preservation of the investment potential of network operators. Of course, spending a maximum reasonable means.

On the second question, I can say that Ross exceptionally high level of prices for interconnect. If you compare with Western Europe, where prices have declined from year to year, and the US, where they are, the situation is not normal. 0.95 rubles. - A very high price when compared to the ARPU (average expense per subscriber per month -. RBC) of 300 rubles. and the average cost of a minute. Here, the price of interconnect above from 3 to 6.8 times compared with the prices in Europe. I believe that in the interconnect prices should gradually decrease significantly. This will help us in the transformation.

We are moving to pricing based on the growth of mobile traffic. The market should move in the direction of virtually free voice and SMS services, and several variants of tariffs for mobile internet. It is irrational that someone can download the 60-70 GB, network load, with no limit to use cheap or almost unlimited tariffs. This is a question to be addressed across the industry. If nothing will change in the long-term capital costs will be unaffordable.

- Whether the preconditions in Russia add up to operators to raise prices for the internT services? You yourself said that they are quite low.

- I can not speak for other players. But I do not think the mobile Internet prices must rise. What I'm talking about - if you download a lot of traffic, you have to pay more. This regulation of the use patterns and intensity of our capital investments.

"The industry needs to be more proactive"

- There was a discussion that telecom operators need to force Internet companies to share revenue, since companies like Apple and Google earn your infrastructure ...

- The debate went on for several years. Of course, we can say that if you are based in the US with the rights to the content and use huge resources of others to convey the content, such as video, users in other countries, you bring high costs to operators. But I think that the industry needs to be more proactive. We need to focus more on what kind of new value we can create for users in relation to our business than in the guard position, how to get paid for the use of nShih resources. I think the shift to data-centric pricing (price linked to the volume of consumed traffic -. RBC) will help us in this, because if you seriously driven; mobile network, you have to pay for it. This is true. A common situation is for a fixed Internet provider when there is a new series of "House of Cards", all eager to see it in the same time, and it becomes a great challenge for the network. On the one hand, data-centric pricing to help solve this problem. On the other - we, the industry, should be better to introduce new services in addition to basic telecommunications services.

- Now, all rely on the Internet of Things (IoT, the Internet of Things). What kind of new services do you say?

- There are no limits. The possibilities are virtually endless. With the introduction of 4G we can deliver all the people, what they could dream in 2000, when we launched 3G. Everything that is connected with the video and streaming, content, instant messengers, you mentioned IoT. Anything that can make people's lives easier: a transaction, shopping, financial services, IP-services. It is a combination of platforms and services that we develop withs, and what do our partners. Obviously, we do not do everything yourself, 70-80% of services will be done with partners. Business models will be different, too: revenue sharing, profit sharing (division of revenues and profits - RBC.).

- These services will help operators increase revenue, which is now stagnating?

- Depending on the specific market. But all that belongs to the streaming video and, of course, rests on the ability to support the requirements of data services. If the pricing is right, the industry will be able to support the development of revenue. Only the services as such will not be sufficient to return the company to the high rates of growth, when, in fact, everyone has a mobile phone. Data transfer - this is the right direction, but we need to offer something else besides her, to grow outstanding pace.

- There was an impression that your competitors are increasingly realize what you're saying. On the initiative of "VimpelCom" or do not know or do not have them yet ...

- We are going to present and market results. But from my sideudet not very far-sighted today to talk about the terms and details. But for the group, and for the Russian "VimpelCom" is a work of high priority.

- VimpelCom agreed to combine their Italian "daughter" with other local operators. Is market consolidation is possible in Russia? When?

- Italian deal was for us a fantastic breakthrough. We managed to create the leader in fourth in size in Europe market. In Russia, I do not know what they think of our competitors, what they want to do. We, in turn, focus on running your own business.

- There were rumors that "VimpelCom" is in talks to merge with Russia's Tele2. This is true?

- Do not comment on rumors and speculation.

Kjell Morten Johnsen in 2000-2016 he held various positions in the Norwegian holding Telenor, one of the largest shareholders of VimpelCom Ltd. Including in 2006-2009 headed the Russian subsidiary of Telenor. In 2009-2012 he headed the operations of Telenor in Serbia, in 2012-2016 - in Europe, at the same time taking up the position of Executive Vice President of Telenor. He was in the village councilRector of the Russian "VimpelCom" (2007-2013) and the Supervisory Board of VimpelCom (in 2011-2015). In 2016, Kjell Morten Johnsen moved to Vimpelsom to head major markets (Major Markets), which include Russia and Italy. Prior to joining the telecommunications industry executives worked in French and Ukrainian offices of the Norwegian oil and gas company Norsk Hydro.

Vimpelsom Holding Ltd. It formed in 2009 from the merger of "VimpelCom" and Ukrainian operator "Kyivstar". At the end of June, has provided communication services 194 million subscribers in 12 countries. 47.9% Vimpelsom LetterOne owned by Mikhail Fridman, German Khan and Alexei Kuzmichev, 23,7% - Telenor, 20,1% - is traded on the stock exchange, 8.3% - from the Dutch Trust Stichting SAMTI. Capitalization on the NASDAQ yesterday was $ 5.77 billion revenue for the second quarter of $ 2.16 billion, net profit -. $ 138 million.