Malcolm Rodrigues is a busy man.
As the CEO of Singapore-based ISP MyRepublic, Rodrigues’ duties involve him building the company from scrappy little underdog to a legitimate player in Singapore and beyond and sometimes talking to media types like myself.
His office is not in some shiny, office tower with views to-die-for, like you would imagine with most corporates, but in a small unit in an industrial estate on the East side of the island. The office, like that of most startups, is small and abuzz with people doing way more multi-tasking than they should be.
The office is so small and busy that there are no meeting rooms free for our interview, so we trek a small distance to MyRepublic Labs, the company’s R&D office where we commandeer a small office.
“We hire crazy”
“We’re all crazy,” he says, “Everybody here is crazy. We hire crazy,” Rodrigues says, as he notices me looking around the office.
Crazy seems to have worked out for MyRepublic, with the company reporting 300 per cent year-on-year customer growth.
The journey to this point has not been easy though. According to Rodrigues, when the company first came into existence in late 2011, the Internet scene in this part of the world was pretty bleak and it had been hurting local IT companies like MyRepublic.
“When we launched three years ago, there were no startups, no VCs. I remember going to Demo Asia, there was a guy from Silicon Valley and everybody asked, ‘How do we get funded?’ He said, ‘Well, if you have a good idea, pack your bags and move to California because that’s the only place you’ll get money’,” he tells me, grimacing a little.
Gaining the respect of the incumbents was also hard for the fledgling company, “Back when we first launched, we had lots of good brand recognition and we wanted to buy local from SingTel to connect to Singnet customers, they wouldn’t sell to us. They said, ‘No, we aren’t going to connect you’. I think they thought we were doing weird things,” he says.
He quickly adds, “They see now that we are going to kind of settle into this five to 10 per cent market share place, so they are kind of ok now.”
The scene has become a lot better now though, and according to Rodrigues, greater penetration of high-speed Internet has been a major component in Singapore’s rapidly growing tech sphere.
Singapore, startups…the broadband connect
In 2013, an Akamai study showed Singapore as having the 19th fastest Internet speed in the world, with an average connection speed of 7.9 Mbps but the same study in 2014 showed Singapore had leapt up the rankings to number nine, beating out such countries as the US and Britain.
“Nowadays, there are VCs here, there are even people from other countries moving here, part of it is the economic environment, but part of it is definitely the broadband because you can do everything on the cloud,” he says.
The adoption of cloud technologies, according to Rodrigues, is something that Singapore startups have done very well and it has allowed them great agility, “If you have an idea, if you want to try it, you can get processing power, you can get storage, you can get it all on the cloud, but if you have a crappy Internet connection, you can’t do it.”
“So here in Singapore as a startup, you can actually do and test different things, very easily and very cost-effectively,” he adds.
There is still work to be done though. Rodrigues says, “The pricing (of Internet plans, especially amongst businesses) is still out of whack. We look at some of the prices and it’s huge. We think we can go in and offer a 10MB to 1GB point-to-point service and sell to these larger companies at a much lower cost.”
“We are going to try and disrupt in that space,” he adds.
From ISP to telco
However, as far as the rest of us are concerned, there is a far juicier matter to deal with. I am, of course, referring to MyRepublic’s much publicised bid to transition from ISP to telco, breaking a decade-long three company oligopoly.
Rodrigues says that his company’s bid will become a reality because, “We think the regulator here would like to see some change.”
As far as Rodrigues is concerned, this is a market that is ripe for disruption. “The three operators have gotten very comfortable over time. They have all agreed to a certain space or settled into a space where they are happy,” he says.
“If you look at mobile amongst OECD (Organisation for Economic Co-operation and Development countries), Singapore is ranked near the bottom. We see analyst reports every month saying that Singapore telcos are the most profitable,” he adds.
Another Akamai report shows that as far as mobile Internet speed goes, Singapore is not ranked anywhere near the top with countries like Japan, Kuwait and even Thailand besting the city-state for maximum mobile Internet speed.
“If you ever want to invest money, invest in Singapore telcos. The customers in Singapore also pay the highest, so I think from a mobile standpoint, we are a long way away,” he adds, believing that this is something we desperately need to change.
However, MyRepublic has no plans to blitz the market, instead it seems to be employing a more slow and steady approach. The logic here is to not overcommit, but to have enough of a market presence to carve a foothold in a difficult market, while at the same time forcing the big players to innovate or be disrupted.
“We don’t want to go after the full spectrum like the big guys do. We do not want 50 per cent market share. The market share we are looking at is 10-12 per cent, but we want to come up with a disruptive model and give something that’s meaningful,” he says.
Rodrigues continues, “We think by doing that, and again, we are not looking to destroy the market, we only want that 10 per cent or 12 per cent, but we hope that by doing this, the other operators will come in line and offer more services and more innovation into the marketplace.”
Hurdles in MyRepublic’s telco bid
The journey to fourth telco is not an easy one though. At the moment, the IDA, Singapore’s government body in charge of these things has not even confirmed whether it wants to make a fourth operator licence available.
Even if the licence is available and MyRepublic wins it, the company still has to win the telco spectrum auctions.
Basically, all the operators work at different carrier wave frequencies and certain hardware only works on certain bands and for MyRepublic’s ambitious plan to succeed, the company needs to get the right spectrum of frequencies, which it has to bid for against its rivals.
“We have asked for a very specific spectrum. We have asked for terms and conditions be put in place that will allow us to actually operate and become profitable,” the CEO informs e27.
“We do not want to go in there and say that because of the spectrum we have been given, I need a billion dollars and like 25 per cent market share. It’s unreasonable,” he says.
For his plan to work, he says that MyRepublic has “a model and we have a certain spectrum that we are looking at. If we get it then we can build the network for US$200-US$250 million dollars, which is 20 per cent of what people have historically used to build their networks.”
This uncertainty has not seemed to dampen Rodrigues in any way, with MyRepublic announcing a few weeks ago, that it would be launching a 4G network trial in the Jurong Lake District. The trail would see applicants receive a 4G SIM card that would give them free, unlimited 4G access in the trial area.
According to him, “Around 13,000 people have signed up in just a few days. It’s come to the stage where we can say that this is not just a trial anymore. If you want a voice in this process and tell people what you want, you can sign up.”
This is not MyRepublic’s first foray into the telco world with Rodrigues sharing, “We have always been looking to do an MVNO (mobile virtual network operator). What this means is that you use an existing operator’s network and you white label it.”
Back in 2001, Virgin Mobile actually tried to do this, running off SingTel’s network but the venture failed, which saw Virgin Mobile pulling out of Singapore just a year later in October 2002.
How to build a network for cheap
“The problem with that (being an MVNO) is that you become a slave to the cost base of the incumbent. They are running 2G networks, 3G networks, LTE, they have 10,000 people and they take that efficiency and put it into their wholesale pricing. You can’t innovate and you can’t disrupt with that model.”
This lesson caused Rodrigues and his team to go back to the drawing board. “We looked at it and thought that technology in mobile has come a long way. You can now build a network for a fraction of the cost the big guys had done historically. You can operate it a lot cheaper and the world is moving to this place of fixed mobile convergence.”
When I asked for him to clarify, he opines, “The entire world is moving into playing in two areas: if you are a content or an apps provider, there’s a role; if you are an access provider, fixed or mobile, there’s a role. For everything in between, your business plan is up for debate, whether you are a cable TV company or whether you are an integrator of applications.”
He goes into further detail, “HBO, Disney, they all have online portals to watch content directly and today we believe that people want to watch what they want, when they want on any device they want and where they want. The ‘where they want’ is what our interest in mobile comes from,” he says.
“Today, we can provide a great experience for people to watch their video and access their content at home and at work. We want to be able to extend that experience. We want to be able to say, ‘You are a customer, you want a seamless experience no matter where you are in Singapore and that’s our reason for getting into mobile’.”
He pauses for a moment and says, “We want to kind of revolutionise that.”
One of the disruptions MyRepublic wants to bring to the table is something called ‘National roaming.’
What this means is that basically, no matter where in the country you are and regardless of your telco, you would automatically be able to connect to the telco network that is strongest in your location.
“Singaporeans are not easy customers to please. They want the service to be working everywhere; they want it to be working in elevators and underground,” Rodrigues chuckles. “With national roaming, I can get off the ground fairly quickly by around the end of 2016. Without it, I would need a year or a year- and-a-half to get the network up and running.”
As for what kind of response he expects from the current telcos regarding his plan, Rodrigues says, “I think they (the incumbents) are nervous, about the impact of a fourth operator, not just us but any fourth operator. Everything has just been so steady for a while.”
“We will bid and we will win”
“I expect that if a fourth telco licence is announced, they won’t wait, they will start to lock people’s contracts. The good thing is that you will see 2GB data caps go to 5GB data caps,” Rodrigues adds.
“I bet you a day after the government says, ‘Here is the plan for a fourth telco’, data caps will go up in an attempt to diffuse the situation. I think what they don’t realise is that when they go from 12GB to 2GB, they will piss off so many people,” he predicts.
“I think the incumbents have become arrogant in their approach historically and I think they have burned bridges with a lot of their customers,” Rodrigues says, not one to mince his words, “We are confident that a fourth telco licence will be made available. We are confident that if the IDA has put the right conditions in place. We will bid and we will win,” he adds.
A new approach
“We want to build something disruptive and different. We want to build something completely new and completely different; it’s a different model, it’s a different cost and it should be a different customer experience,” Rodrigues says.
He continues, “The IDA has heard us, we have met with them many times and I think they will put something in place that makes sense to us and we will go after it aggressively. We are in the process of raising money for the bid and we should have it done by the end of summer. We expect a framework from the government to be out this May or June and we think the spectrum auction will take place in December or January (2016). It takes a few months to award so we think by the middle of next year, we will know for sure.”
He ends the interview by stating that at the end of the day, corporate culture is what will drive these initiatives.
“In our culture, it is really about keeping things simple. It’s about driving innovation and change. It’s about empowering people. It’s also about mistakes. We want our employees to make mistakes and learn from those mistakes. Too many companies get stuck and it’s too difficult to make decisions and then they look for the perfect solution,” he says.
It is all about doing the best you can with the cards you are dealt. “There is no perfect solution,” Rodrigues ends with a laugh.
Image Credit: MyRepublic/ Techgoondu