In February 2001, a car carrying three friends passed the Telenor building in Bergen, Norway, on route to the airport.
The driver, Leon Rasiah, spotted his companion in the rear-view mirror, smiling. “Why are you smiling, Ratheesh?” asked Rasiah.
Ratheesan Yoganathan looked back from the Telenor building to his friend. “You know, to build something like that, someone must really have worked hard,” he said.
In the passenger seat, Baskaran Kandiah twisted around. “Don’t you think we can do that?” he said.
As the trio waited by the departures board inside the airport, they took a piece of paper and drew up plans for a distribution business to serve the international prepay calling card market.
The new distributor would bring a fresh service ethos to a sector known for its sharp practices, and take its title from the first letters of its founders’ names – Le(on), Ba(skaran), Ra(theesan).
Lebara launched in Norway and the Netherlands in late 2001. Right away, its founders sought to fix a basic trade error; that demand outran supply Friday evening through Saturday night, when businesses shut down and the lines lit up. They immediately put in place 24/7 client services, itself a considerable innovation in the space.
“We didn’t have the money for this kind of thing,” says Yoganathan (pictured), today, in a smart Clerkenwell restaurant, a short cab ride from Lebara’s international group headquarters in Whitechapel, East London, and a long way from Bergen. “Service was the only thing we could provide.”
To understand Lebara’s journey from distributor start-up to multinational mobile virtual network operator (MVNO), one should consider the wild-west calling card sector in which all the current UK ethnic market MVNOs have their roots.
The calling card space for prepay international calls, estimated to be worth £500 million in the UK alone, has largely operated outside of the bounds of the rest of the telecoms industry. Regulatory intervention by Ofcom and its local market equivalents is rare.
By its nature, business is conducted on all sides in a mess of different languages, making the provision of any kind of customer service difficult and giving rise to a culture of deception: charges are rigged in the small print, network quality is poor, support lines are intermittent at best.
Worse, rivalries are fierce and spoiling tactics are notorious. Marketing and distribution to minority groups is diverse and imaginative, but it can also represent a kind of guerilla war for its protagonists.
It can turn nasty too. Anecdotal information about old rivalries from the calling card market spilling over into the new ethnic MVNO space are common.
For his part, Yoganathan prefers to speak only of the billing and customer service issues for long-distance callers.
He says: “The calling card market never provided customer service in the first place. Even if it did, it has rarely been proper service. They might pick up the phone, but that’s about it.”
He adds: “And that culture from the calling card market is reflected in certain other MVNO operations now.”
The point is, from its early development as a distributor, through its investment in switching infrastructure and its reincarnation as a calling card operator in its own right in 2002, to its total reinvention as a mobile service provider in 2004 via an MVNO deal with Dutch operator Telfort (now KPN), Lebara has defined itself against the rest of ethnic market providers.
“We could see from very early on what the ethnic market got, and what it needed,” explains Yoganathan.
“The strategy was to be like a mobile operator that provided an international calling element, rather than like a calling card operator that happened to offer the convenience of mobile. There is a significant difference.
“Everything – our branding, pricing, service – is presented as, and measured against, the mobile industry, not the calling card market. We are providing a mobile service after all. And why, just because these customers are making international phone calls, should they be treated differently?”
Full article in Mobile News issue 431 (January 26, 2009).
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