Sustainable Success Stories: lifecell
Lifecell is the third largest telecommunications operator in the Ukrainian market, and, just like every infrastructure company, throughout the last year it has had to navigate the high risks imposed by the ongoing war in Ukraine and dealing with its consequences.
Viesturs Liegis, Managing Partner of Amrop Ukraine spoke to Ismet Yazici, General Manager of lifecell, about running the company in a time of war, the close cooperation between lifecell and the Ukrainian army, the collaboration with the other largest telecom operators in Ukraine to provide means of communication for the Ukrainian people and about innovations and fulfilled investment plans, which the war hasn’t halted.
“People in the field were desperate, they were not able to communicate with their families, so we appealed to President Zelensky. We sent a memo around midnight explaining the importance of national roaming, and at 6am the next morning the President had issued the order. We started national roaming the next day and it’s been working ever since, giving lots of people the chance to communicate. I will always be proud of this.”
Viesturs Liegis: Throughout last year lifecell has had to operate, taking into account the risks and the unpredictable turns of events imposed by the ongoing war in Ukraine. When you realized that a full-scale attack had been launched on February 24 how did you change your way of working and how were you able to ensure the operation of critical infrastructure?
Ismet Yazici: Actually this was the kind of war which warned us of its own approach in advance, which provided a certain advantage for us and the other operators - we started taking some measures 2-3 months before it started. So, in a way we were prepared, but, of course, the big question: “What’s going to happen?” could not be answered. One can prepare, for example, we were expecting an attack in the Eastern part of Ukraine, so we had started moving our critical infrastructure in the East to the Western part of Ukraine – it was a secret operation: we moved our data centre, our BSCs and other critical equipment - some to Kyiv, some to Lviv. But then, on the very first day of war, there were bombings in Kyiv and the next day the Russian soldiers were already only 10-15 kilometres from Kyiv, and there was, of course, panic – we still had no idea how the war would be impacting communication infrastructure. For each mobile operator the most critical parts of the infrastructure are the data centres, the billing centres, the network operation centres. Of course, we also took some physical measures to strengthen our buildings, like covering windows and so on. We took all the measures which, according to our knowledge, were possible in the face of such a massive unknown. The first step then was to mobilize our critical infrastructure. For example, when the Russians invaded Kherson, they immediately captured the data centres of Kyivstar and Vodafone (the first two largest mobile operators in Ukraine) and cut their communication. lifecell was the only operator which continued providing services to the people in Kherson for almost a month until the Russians found our fibre optical cables and cut them. One can say that we were lucky because the communication infrastructure was never a direct target of the enemy; of course, lots of sites were lost anyway, because they were cutting our communication in the occupied areas, and there was nothing we could have done about it. Lots of sites were in “hot” areas, where there were 1000s of bullets and shells flying around, which, of course, destroyed the equipment.
Viesturs: The front line now is more than 2000 kilometres long, and, presumably, you need to be able to provide services in these areas too. How are you able to operate under the conditions there?
Ismet: We owe a big “thank you” to the Ukrainian army. From time to time we are temporarily losing sites due to the damage to the electricity infrastructure, and as soon as shelling in the particular area gets milder or is stopped altogether, our field teams are going to these sites together with the Ukrainian army to repair the connection. We’ve been providing the communication services mostly to the army, of course, and we’ve also put to use mobile-based stations which are moved around along with the army. The military, of course, have their own means of communication, however, thousands of soldiers are using mobile phones – it is very critical for them to have a decent level of communication and we, alongside the other operators, are doing our best to support them.
Viesturs: If I understand correctly, the Russian army was planning to cut off the base stations of the Ukrainian operators as soon as they were captured. How successful were they?
Ismet: Just like our army, the Russian army was looking to establish means of communication, and they were well organized. As soon as they occupied a certain territory, they cut off the Ukrainian communication and started their own base stations. Sometimes they were capturing the base stations of the Ukrainian operators, but this was one of the safety measures we had already taken before the war started. Under normal conditions, unless you know the password for a base station, there is no way you can convert it into your own base station. So, before the war we had deleted and changed all the passwords in the base stations. Those passwords are normally known by lots of field technicians, but we set it up so that only one, maximum two people from our teams knew them. This is why none of lifecell’s base stations were used by the Russian army – even if they were located in occupied regions, they were just metal boxes, nothing else. Yes, we might have lost lots of them, but the enemy wasn’t able to use it for their communication either.
Viesturs: Are there any base stations in the occupied territories which are still functional?
Ismal: No. They’re either shot down or all the connections were cut. Sometimes it takes them a long time to find out where our cables are but all the base stations under the temporarily occupied territories are currently operationally lost. But, of course, the Ukrainian army started the mass counter-attack and began taking back their land – in Kharkiv hundreds of base stations were returned, and with some minor adjustments we put them back in service again. Thus, it’s happening around the clock now: we’re moving alongside the Ukrainian army, and the army is always informing us where they need the coverage, or, as soon as they’ve taken back a territory, they check if there’s a base station there, contact us, and we send our filed people to put it back into operation. It is a high adrenaline activity, for sure. However, we have our criteria – we’re not risking any employee or a subcontractor of lifecell, and this assurance is coming from the army. The army is very sensitive to this: when they took back Kherson, there were a number of base stations in the city on top of the buildings – they didn’t let us enter any building before they had made 100% sure that there were no traps, no bombs there. So, it has been an excellent cooperation with the army.
Viesturs: When the war started, did you implement a special policy for employee safety? Presumably a lot of lifecell’s employees relocated to other countries or other parts of Ukraine.
Ismet: Before the war started, we had lots of meetings where we discussed how to help relocate the people safely. When on the first morning of the war, the bombing started in Kyiv, we gathered in the office, and, of course, there was a panic. In my considerably long life I’ve never before witnessed a war, but it was critical to remain calm. After the initial panic you realize that it doesn’t help, because you’re responsible for 1200+ people and first you need to think about their safety. We had established all the communication channels to use in case of emergency or if anybody got injured – we had prepared all these measures. I was also amazed how this kind of extraordinary circumstance can be very useful in teaching you new things. There are a number of books called something like “Management in times of crisis” and all, but they don’t prepare you for anything like this… war is the real crisis! And we all realized that then. It was like an acid test for us, for our employees. But, before the war had started, when Russians started putting soldiers on the borders, our employees from the Eastern part of the country had started moving to the Western part of the country, and we were helping with the planning. But, without really knowing if and when something would start, it was hard to convince people to leave their homes. Many thought the talks of war were still just a bluff. But, as soon as the war started, and we saw that it’s not just limited to the Eastern part of Ukraine, we had to change plans and start moving people out of Kyiv too. Female employees and those with small children found ways to cross the border, and on the very first morning of the war we issued a management order saying that whoever was using the company car could take it wherever they wanted. We also organized shuttle buses to evacuate people from Dnipro, Kharkiv, Zaporizhzhia. Also, during the first days of war, thanks to the Latvian government, we were able to send about 60 people to Riga, where everything was arranged for them. Many are there still.
Viesturs: Right. And, when it comes to the technical support teams who work on the ground, how do you ensure their safety?
Ismet: If there is active warfare going on, nobody is supposed to be on the street even, and we continuously repeat these announcements to our employees too: don’t do anything, don’t come to the office. Actually nobody was coming to the office until the blackouts started. The most critical were the mobile network people, because they cannot do all their work remotely. The ICT teams can do everything from their homes, even from shelters, but the mobile network teams need to be in the field too. We have a rule – don’t take even the 0,0001% risk. We keep telling people that Ukraine will come out of this a victor, but to be able to see this we need to be alive! When it is 100% safe to be outside, we can go and do our jobs. The sales people are out there too, because this war has also shown us this: if a person has a roof over their heads and food and water, the third requirement is communication – the Maslow pyramid needs an update!
Viesturs: So there is an even greater demand for your services now!
Ismet: Of course, there had been some communication cuts for all the operators, and lots of people needed alternativ SIM cards. For example, when Kyivstar lost one of their sites, their customers were trying to get new SIM cards, and we mobilized our sales teams, so it has been a great team effort. I’m really grateful to our guys, they’ve really demonstrated what team spirit really looks like.
And we’ve done other things, not only for our customers, but for all Ukrainian communication users. Having seen thousands of sites go down during the first days of war, we realized that it’s a must to have national roaming. We approached the authorities with this idea, and, though there was some resistance from our operators, saying that it’s too difficult or technically impossible, we managed to make it happen. People in the field were really desperate, they were not able to communicate with their families, so we appealed to president Zelensky: we sent the memo around midnight explaining the importance of national roaming, and at 6am next morning Mr president had issued the order. We started national roaming the next day and it’s been working ever since giving lots of people the chance to communicate. I will always be proud of this.
Viesturs: Introducing national roaming – that’s an incredible achievement. But, as I understand, you do have other ongoing cooperations with Kyivstar and Vodafone.
Ismet: Yes, of course. On the very first day of the war we realized that we had lost some smaller regions entirely, and, of course, our customers would be searching for other operators. Ukraine is a multi-SIM market, so we immediately offered our frequencies to our competitors in the regions we lost. Of course, we’re still competitors but the war has taught us all a lot, and we’ve been cooperating very closely, trying to find solutions. We’ve been meeting on common grounds, doing whatever allows us to support Ukrainian people together.
Viesturs: What, would you say, was the most unexpected issue, which there was no way to predict before?
Ismet: The electricity. When attacks on infrastructure, which Russians started in November last year. They changed their approach and now there are these massive attacks – during their second attack we lost 65% of our sites, the same for Kyivstar and Vodafone, which really caused some panic. Yes, we never lost our central points, and we have huge generators, which consume tons of diesel, and there are hundreds of transmission points in the field. Once I personally attended the mobile generation operation so that I could see what difficulties there are and what could be improved. We were going to a ten-story building: you leave the generator downstairs, you run the cable to the top of the building – you start the generator, then within a couple of hours the diesel finishes, so you go to sites with two big canisters of diesel, you fill it up, and go back, and, until the electricity comes back you cannot leave the site, because your generator could be stolen. And imagine doing this in -10 degrees! Lots of lifecell employees volunteered to take part in this operation: we have been running around with 200 generators, moving them from site to site, and each mission takes 12 hours. I would say that the shock of this turn of events was even bigger than at the beginning of the war. We realized also that we cannot sustain this operation with mobile generators, so we immediately started ordering new generators, millions of dollars’ worth of equipment. Another problem was the supply, because even in the USA hearing about these blackouts caused a panic, and the supply of available generators quickly dwindled – it became difficult to get them. So now we are paying double the price for the generators, but it allows us to quickly increase the number of them in our network. What doesn’t kill you makes you stronger, so to speak. We’re getting stronger with every step.
Viesturs: What has been the financial impact of all this? I know that you’ve kept paying wages to everyone.
Ismet: At the beginning of the war people were mostly worried about their physical safety, and then the second biggest worry was their financial security. On the second day of the war, we reached out to all our employees telling them that their safety was our number one priority: that until the war ends, as long as the company will be generating some revenue, nobody should be worried about their jobs and their salaries. Because of the war lots of people were not able to do their regular jobs, but we told them it didn’t matter - as long as they were keeping themselves safe and, if possible, were helping with any local initiatives to support people around them, we considered them to be doing a full time job.
Viesturs: lifecell has always been a very innovative company. What is the situation now: are all your efforts focussed on ensuring the basic services or are you also working towards the future, the potential growth and implementation of new services?
Ismet: It’s funny to say it now, but it looks like our innovative approach is finally paying off. Even before the war started, even before COVID-19, we were ready for such times. In our company everything is incredibly well-adapted for remote work – on all levels. For example, as a manager, no matter where you are, no matter what time of day, you can see all the company’s parameters, from sales to mobile network, from quality parameters to financials. We are one of the very few companies which is able to calculate their revenue on a daily basis. We started our digitization approach five years ago, and COVID-19 didn’t impact us at all – people were working remotely and the company was working like a clock. And if you look at our financial reports, we were never the fastest-growing company percentage-wise – Kyivstar and Vodafone had always been ahead of us. But when COVID-19 started, the two “big guys” were facing a lot of difficulties – it took much longer for them to figure out how to manage their business remotely. In the meantime, we started making a difference – since the 2nd quarter of 2020 we’ve been the fastest growing of all and had increased our market share: within the last two years we’ve captured more than 3% from the revenue market share. Ironically, when the war started, we were in an even better shape: for example, last year we introduced the electronic SIM. When people were desperate to buy SIM cards and there were no shops running, no place to go, with lifecell you could buy them online – you just received an automatic email with the QR code for the SIM card, and your line was ready to work! So, I was happy to see that people were appreciating lifecell’s innovative approach, and we’ve not stopped working – all our functions have been operating, from marketing to ICT. During the war we introduced new packages, for example, which focused on Ukrainians abroad – free of charge roaming packages, giving free usage for everybody in and out of the country. So, I would say that we’ll be emerging from the crisis having learnt a lot, implemented a lot, and we’re very happy with the financial results and the growth of the company too.
Viesturs: What’s the position of Turkcell as a shareholder of lifecell? How much does the mother company support and help lifecell in this crisis, and what are the long-term plans of Turkcell when it comes to the business in Ukraine?
Ismet: The very good news is that we didn’t actually need Turkcell’s help – financially or knowledge-wise; we were very well equipped and seasoned, but, of course, they were helping Ukraine: they sent a convoy of trailers with humanitarian support, especially to people who were stuck on borders. Other than that we were always in touch with them and, of course, it was a moment of big panic for them too – they’ve invested billions of dollars in a country and the country had just started becoming profitable in 2020, and then a war starts. They were, of course, concerned, but they always believed in us, and I was informing the chairman and the board members of what’s going on in Ukraine on a daily basis. This way they had a better understanding about the war than watching it on CNN - I was telling them what the risks were, what was going on, and what were the scenarios. So, they also adapted, and our investment decisions were never stopped: during the war we installed more than 600 brand new sites, because of the big demographic move in the country, when the population moved to the West. Of course, the existing capacity wouldn’t be enough for anybody, so we acted very quickly. We started investing in the regions, or the cities which lots of people migrated to – Lviv, Ternopil, all these Western cities. Normally a typical shareholder would say: let’s not take the risk, there is a war happening, but we explained everything to them, we told them about the promising future that’s ahead of Ukraine and which we never stopped believing in, and I’m grateful they trusted us on this. Of course, we cannot tell how long the war is going to last, but hopefully there will be peace soon, without causing more losses to Ukraine.
Viesturs: Now everyone is talking about the great reconstruction which will come after the war – surely, you have your vision regarding this as well.
Ismet: Yes, I do believe that we will see the great reconstruction, the rebuilding of Ukraine take place, but in our case, we cannot wait until then! We’re completing this year’s investment plans as we speak, and we are in the process of ordering lots and lots of new equipment. Of course, we have plans of building hundreds of new sites when the war finishes... Russians destroyed very beautiful cities and people’s lives, but I believe that the whole world will be helping Ukraine financially and also in terms of know-how and that there will be a very quick recovery. And, as people move back to their home cities, we will be there waiting for them. They will not have to wait for the signal – we will make sure that before they step into their homes lifecell signal will be waiting for them.