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22 LIFE
Budapest Business Journal | Jan – Feb
The next generation is so non-linear BACKGROUND In the current century, high-speed telecommunications infrastructure has become an essential platform in all industries. Local UPC chief Kenigsztein believes, however, that these networks should not be treated as simple utilities, but should innovate constantly in order to remain competitive, and this passed on to clients as well. The widespread use of new-generation services would further spur wellbalanced, sustainable competition in the telecom industry. UPC aims to challenge the entire Hungarian market with its video-on-demand service, while continuing the roll-out of its ultra-fast 120 Mbit/s internet service.
〉ON THE DATA SIDE,
WE WILL SEE MORE AND MORE SPEED ON THE MARKET: WE EXPECT SUBSTANTIAL GROWTH OF OUR FIBER POWER PLATFORM
A: What we are seeing in the market is that mobile internet provides additional value, but people are not replacing their landlines with wireless. I have heard that many customers choosing wireless have been disappointed. The applications that people are using require more and more bandwidth, which mobile cannot compete with. Q: Speaking of bandwidth, is the growth dynamic of your premium internet package meeting expectations? A: It exceeds expectations. It was more popular in Hungary at its introduction than for example in the Netherlands. This technology works perfectly, so the question ‘why would we need those bits’ is not valid anymore. In just a few months’ time, more than 15,000 customers have chosen our 60 and 120-megabit Fiber Power packages. Q: What kind of connection do you have at home? A: Unfortunately, I’m not in UPC’s service area, so I use the best solution I could find, which is an ADSL line.
Q: Do your children ever give you ideas about your work, unintentionally? A: I pay attention to their behavior very closely to see what it is that they really need. Our generation behaves totally differently than my kids’ - my daughter is 15, one of my sons is 12 and the other is 9. Social media picked up so quickly because the generation using it is the key user of the non-linear. And we have to deliver it to them, because they are going to be the drivers of the market. Q: Do you watch TV? See any Hungarian programs lately? A: My family was back in Israel between Christmas and the New Year, so I stayed at home, watched a lot of TV and enjoyed it. But I can only watch Hungarian channels if not dubbed or have English subtitles. In the Netherlands, 90% of the content is subtitled, and this helped me to enjoy English shows, as well as helping to learn Dutch. Here in Hungary, dubbing creates a kind of barrier.
Q: Are there any plans for cooperation with mobile services? A: We have very good connections with mobile Q: So you’re testing the competition! A: Well, our competitor is a big company, a operators, but nothing’s been decided or conrespected and well-established telecom operator. cluded yet. One of the options is that if there will It is able to deliver good products, but our prod- be a bid for frequencies, we will apply. ucts are much better (laughs). Q: What could be the most successful prodQ: Some say Hungary should be a two- uct of 2010? player telecom market. Do you agree? A: Among our three major product lines, teleA: Absolutely, and this is not only my opin- phone will remain a stable basic service, as this ion, but that of well-known research firm Bain & allows customers to have all their connections Q: You were appointed to head UPC Hun- Company as well, who have assessed the Hungar- from a single provider. On the data side, we will gary about half a year ago. What has this ian market. They said that in such a high-invest- see more and more speed on the market: we period been like? ment business, it is very difficult to create enough expect substantial growth of our Fiber Power platA: Exciting. The key element was to revenues for more than two players if you want form. As for video, people are moving away from restructure and rebuild the team and to cre- to maintain quality and continue innovations. the traditional way of watching TV. It is increasate the right atmosphere in the company after And markets with two strong players are faster ingly rare for people to just sit in front of the TV a turbulent year. There was a lot to do, a lot to deploy new products or technologies. I always and watch whatever is on. However, non-linear to learn: about the company, the market and thought this but now I feel confirmed. television usage is constantly increasing. In the US, the people. I was learning by doing and I’m for example, video on demand (VOD) and digistill learning every day. Now that the base Q: How does UPC map out customers’ needs tal video recording (DVR) are two key elements is in order, we can start moving ahead and when launching new products? of the digital TV market, and Hungary is moving continue expanding service coverage, the A: We try to create and support a behavioral pat- in that direction as well. DVR penetration here is network, and the number of customers. tern with which we treat our customers, the way similar or even higher than at our other affiliates in we develop and price our products. But this does Europe. As for VOD, our platform is working very Q: Everyone talks about how not mean replacing research on people’s expec- successfully in the Budapest area and we expect to price-sensitive this market is. Do tations and asking people what they want. Our finish the roll-out for the rest of the country in the you think engaging in price com- headquarters are in Denver, so we have very good next 4 to 5 months. AJM petition is a viable strategy? connections with the major operators in the US, A: Price-sensitivity in Hungary is really including personal connections. We also have an high, indeed. Of course, we are not in operation in Japan, and they also bring their views suicide mode and are not going to lower on where we are going marketing-wise. prices to a level that doesn’t make finanBetzalel Kenigsztein was appointed cial or commercial sense. But we cannot Q: Is there anything that wouldn’t managing director of UPC Hungary be detached completely from the market work here? in June 2009, leaving the post of chief either. In September last year, we revised A: No. At the end of the day, customers everytechnology officer at UPC Netherlands, our full portfolio and updated our price where have the same needs, they want the same where he had worked since 2004. Betproducts: robust service and quality for money. structure to be more competitive. zalel has more than 20 years of experiThe fact that we are close to the company’s develence in the cable industry. He has been Q: Is the financial crisis behind you? opments in other places gives us the advantage of instrumental in the innovations of the A: I would say the impact of the finan- being one step ahead of the rest. cial crisis is relatively low in this indusDutch UPC network, helping to make it Q: How do you keep up to date with technotry. Internet, television and telephone one of the most high-end cable systems are something you hardly give up, and logical advance? in the world. He prepared, rolled out A: When I was talking to people about takthat’s the feedback from our customers and operated new digital services over as well: they keep on using our services. ing this position, somebody asked me if I cable networks, including most recently The effects of the crisis are more visi- really wanted to stay a little more distant from Fiber Power, the first commercial impleble when customers think about how technology. But I think that’s not an issue. I mentation in Europe of the technology much they should spend on upgrad- might not be the second engineer at the comthat enables ultra-fast internet speeds ing speed or their cable package. pany who knows all the new R&D results, but of over 100 Mbps. He holds an MBA in I will still remain, say number ten at the line. marketing and a BSc in electrical engiQ: The other major trend of The company has a team structure that keeps neering, graduating cum laude. He is 2009 was the boom in mobile me participating and aware of what’s happenmarried with three children. internet. How did this affect ing, all the way from Denver through Amsteryour business? dam to Budapest.
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