Interview | Wednesday, 30 April 2008

Go mobile’s man calls it a day

Peter Gauci, former Director of Mobile Operations at Go, speaks to David Darmanin about his adventurous career, recent retirement and the challenges facing the property sector and telecoms industry

Peter Gauci’s natural sales skills, his gift of the gab and a patent sense of humour have been central towards the development of his varied and colourful career – from which he decided to step off after retiring six months ago.
Recalling his early days, Gauci goes back to 1963, a year before Malta gained independence. “At age 15 I joined the British army as a boy soldier, as one of the last Maltese citizens to join the British forces.”
After serving for almost nine years, he opted to choose greener pastures as a civilian, joining the illustrious Rolls Royce plant in Coventry, where he was involved in the overhaul of aero engines.
“I did not last very long at Rolls Royce. I clearly remember when a friend had criticised me for being a pen pusher, so I decided to prove him wrong, taking up a new challenge at the Jaguar factory. There I was hands on, on the track, building the XJ,” he said with pride.
In 1974, Gauci came to Malta with his wife Rosemary, had a child, and after only two years they flew back to Britain.
“I missed the beer,” he said, with an impish smile. “Jokes apart, back then, the situation in Malta was very unstable. We had just had a child, so we decided it would be safer to go back to the UK.”
The technology sector in England started showing promising signs at the time. Upon his arrival, Peter joined a company that leased out post-office approved answering machines – since back then, answering machines had not yet been liberalised in the UK.
“This was my first job in sales,” he said.
Seeing that he is clearly a natural in the field, his employers quickly moved him into management, assigning him with the task of heading the regional sales department for the Midlands.
“In 1983, I was headhunted by US telecoms company Dictaphone, and I accepted the job,” he said. “I consider myself to be very lucky for having made this decision, as shortly after, the answering machine market was liberalised, and with that the monopoly disappeared.
“At Dictaphone, I first joined as a national sales manager for blue-chip accounts. Five years down the line, I was appointed Director of International Sales. After two years I was relocated to Zurich, heading the multinational.”
Gaining his breath, Gauci smiled, sat back and pulled: “I had a hell of a varied career.”
With the evolution of Internet in 1993, Dictaphone was brought over by a finance house.
“My son was fifteen by then, so we decided to move back to Malta, where I held various positions.”
Before he became involved in the food distribution industry, where he worked for Wembley Stores, Rimus Riley and Paolo Bonnici; Gauci served as General Manager for the Malta Independent – albeit for a very short while.
“After taking on the post at the Malta Independent I quickly realised that I am more inclined to a business role rather than a media one. In fact it only lasted two months there, then I moved into foods. What I can say is that I always left my posts with a bigger top line than a bottom one.”
His eventual job at Frank Salt Real Estate seemed to have served as a platform for his career big-break in Malta.
“Before Go Mobile was launched, Frank Salt was contracted to locate suitable sites for bay stations. I was assigned with this job, so I located 43 of them.”
During this time, Gauci created sound relations and a good reputation with Go Mobile management. Shortly before launching, he applied for a job with Go and passed the selection process for the post of Dealer-Manager with flying colours.
“From that position I added corporate sales to my area of responsibility after some time, then as Head of Sales and Marketing before finally moving on to heading the Company as Director of Mobile Operations when Juanito Camilleri moved on. In this period, my team and I were very instrumental in the privatisation process of Maltacom.”
Although Peter Gauci now moves around sporting casual wear, he is far from convincing on his retirement. He still walks the walk and talks the talk of a high-flying executive. Daring to ask whether he regrets retiring, Gauci hesitated for a few seconds, but then quickly thought of a joke and said: “No I don’t. I only retired six months ago. Of course, I miss being part of the success of Go Mobile. When we started, the average age of the personnel was 28. Since I left, the insurance premiums must have decreased considerably, hence profits increased.”
It seems that Gauci was quicker to attain the top jobs in the UK rather than in Malta. It would only be reasonable for one to immediately land a high-profile post with such international experience behind him. Comparing the two countries vis-à-vis opportunities, he commented: “Working in Malta is a lot tougher than it is in the UK. This is probably because of our restricted size. Competition is fiercer here, so you need to be always on your toes. The UK offers greater opportunities for those prepared to work and take on challenges. I maintain that my international experience helped me a lot in Malta, as I have ensured to pass on knowledge gained in all of the posts I held – to the enjoyment of both my superiors and other colleagues. I feel very satisfied when I see youngsters grow within a company and eventually move on to management. I don’t fear seeing young people move on, and that’s probably because I’m old. It is also because I am army-trained and I’m not the type of guy who would lead from behind a desk.”
Perhaps ironically, although Gauci had had vast training in telecoms within the international field, what jump-started his telecoms career in Malta was a superlative stint in the property industry. He seems to know a lot more about property than meets the eye.
“Property in Malta needs to have a period of rationalisation, for want of a better word,” he said. “The same thing is happening in the UK – they call it ‘boom and bust’. The UK situation is very difficult at the moment, especially with the problems they have with the sub-prime credit crunch. The market needs time to adjust there. With regards to the Maltese market – there is clearly an over-supply of apartments.”
Without mincing his words, Gauci proceeded to claim: “Apartments in Malta need a downward adjustment. On the other hand, with places like bungalows you can be more bullish with price expectation. Clearly, there is the problem of over-development in Malta and this calls for more realistic approaches.”
Does he mean to say that property consultants face fiercer challenges now than ever before?
”Well, in my days there were less players. But the market has evolved a great deal since then. The Maltese now are more ready to go through an estate agent, with competition in the real estate sector resulting in more controlled prices set by real estate agencies. Working in property requires a lot of hard work. Clients are becoming increasingly discerning, while couples and first time buyers tend to wait more nowadays before committing themselves into the hefty investment of purchasing property.”
Moving on to his pet subject, Gauci explained how he expects to see the telecoms industry develop now that new forms of competition are setting worrying challenges in a sector where competition is becoming increasingly fierce.
“Upon launch, Go Mobile had come out with leading cutting edge technology. It was never meant to be a cash cow, as it was always technology led – which clearly required significant, ongoing investment.”
Alternative mobile telephone services, using a platform called Mobile Virtual Network operator (MVNO) are now available in Malta by means of an agreement signed between a foreign telecoms company and Vodafone. Using the MVNO platform, the Eden group will shortly be launching a service baptised ‘Bay Mobile’, while many more new operators are expected to follow.
“It is quite likely that the MVNO product in Malta will be aimed towards the younger generations, predominantly SMS users. Everything indicates that the MVNO product will be price-driven,” Gauci claimed.
“The way I can see GO react to this (MVNO phenomenon) is by making its customers feel they’re getting good value through the centralisation of its four products. GO is muscling up its strength from its various subscribers to different services, ensuring an increased perception of value. It is making its subscribers realise that it is not worth unsubscribing for a cent less on your mobile phone use at the cost of losing good value on fixed, TV and internet. So I can’t see the battle being a price-to-price issue. GO is facing challenges to retain competitiveness by consolidating itself as one entity-one culture, with its customers being the main focus of operation,” he added, later warning that: “At the same time, GO needs to ensure that consolidation of its operations also remains effective, in order to ultimately keep the shareholders happy.”
Melita Group recently got hold of a 3G license, setting off alarm bells in the industry now that an upcoming third mobile operator is expected to make a consiberable impact on the subscription bases of both GO and Vodafone.
“3G has an inherent operational issue,” Gauci commented. “It requires a larger number of bay stations than other forms of mobile technology, such as 2G. The new operators need to be very careful on how to position themselves. If they decide to start competing head-to-head with GO, as they are also on the way to becoming quadruple players, they will need to invest significantly. This is not to mention the topographic problems we have in Malta. Now, 3G in Malta requires a larger number of bay stations than any 3G setup in most other countries. This is due to a number of factors – such as the large number of hills and thick walls in places like Valletta, to mention a few. What I am saying is that the new players will have to make considerable investments and very complex planning if they want to compete. In this industry we all know how difficult it is to locate suitable sites for bay stations. Another point that would need reckoning is that I am assuming that the third operators’ shareholders would want to receive a return on their investment within a reasonable time.
“I can’t see this happening. One also needs to take obsolescence into account, where you would also need to look into re-investing in new equipment in a relatively short period of time.”
In conclusion, Gauci explained how he expects the trend to develop within the telecoms industry, highlighting that the days for fixed line telephony are counted.
“Clearly, the company that can best service a client base with all four services is going to enjoy better success in the future. In this case however, there could be a difference in opinions. Some argue in favour of quad-play while others will promote the triple-play model as a more feasible option. By quad-play we mean Internet, TV, mobile phone and fixed. By triple-play we mean Internet, TV and fixed line, without the provision of mobile telephony services. The argument in favour of triple play is simply due to the fact that whereas it is likely for the main household earner to pay the bills for TV, fixed line and internet – mobile telephony is personal, with the bill being paid directly by the individual user. The way I see it is that as a future consequence to downward trending in fixed telephony, the transition from fixed telephony to mobile telephony will further accelerate. When fixed will eventually become a thing of the past, the entire commercial dynamics will change. In any case, GO’s business segment is focused on supplying centralised services to the client.”