We want to create new quality of life and earn money on this
— Which projects of ER-Telecom are able to contribute in the nearest future to the execution of tasks set out in the President’s Decree dated May 7, 2018?
— Our company actively participates in the implementation of the state program «Digital Economy». We are some of those who delivered internet and digital TV to the millions of homes across the country.
The world has changed. In the last ten years the number of internet users grew 2.3 times and the number of websites — 6.5 times. In 2009, each fourth person in the world used the internet, today over a half of the Earth’s population goes online. As to our country, in the last decade the penetration of wired internet in Russia also went up 2.3 times, and the audience of Runet grew to 90 million users. Today, over 60% of the country’s population use the internet on a regular basis.
Our country as well as the world in general is undergoing digital transformation. Today, ER-Telecom is not just a company that provides broadband internet and TV services, we also develop and implement digital services. They include «Smart Intercoms» with a face recognition system and embedded services for instant communication with specialized departments, and the systems of controlling heat, water, power, etc. A new market of «Smart Cities» has appeared and is growing at a high rate, and we are actively developing it.
— Aren’t you afraid to work with the government?
— Our company is eighteen years old. For at least fifteen years we preferred not to work with the government and we avoided having business with the government sector. We stayed focused on our private customers, then we started to focus on private companies. We have a motto that we are a private company for individuals and private businesses. Today, if you ask me, how much we earn in private business sector and in B2G, the share of B2G in the revenue is just 2.5%. This year we expect to earn about RUB 1 billion of revenue.
— So, you are afraid to do it?
— No. In 2015, we have revised our position in respect of the public sector. We have understood that we can come up to the regions of our operations with new innovative products which will create new quality of life for our customers. We see our mission in making our users satisfied and happy. We know that the costs of internet account on average for less than 1% of the total costs of our customers. Actually, about 0.9% of the total household income. When our customers are at home, they spend over 40-50% of their time on the internet. This means watching TV, YouTube, communicating. Thus, it turns out that 1% of costs provide for 50% of life of our users. We are aware of our responsibility for the level of service that we offer. We have also understood that we cannot grow any further in B2B and B2C segments according to the old paradigm.
— Is B2C market finite?
— In the past we just came to a customer, plugged a cable to WiFi router and provided services. Then we have noticed that the needs of our customers have outstepped that. They want us to create new digital services that improve the quality of their life. I would say that we digitalize everyday life and make it more convenient and comfortable, and only when we do so, our customers experience the WOW-effect. That means that we anticipate their expectations. If we just provided internet connection, we would be similar to a regular water or power utility company, which are treated with indifference. But we want to be loved. This is why we launched our «Smart Cities» program. We created internally a large project team. About 100 people work on the development of products for the «Smart Cities». We want to make the life of our customers in the cities better, safer and more comfortable. Therefore, we started studying different approaches. To tell the truth, I was surprised with the discoveries that we made. For example, «Smart Intercoms». At first, we entered the intercom market, because we saw that analog intercoms are outdated, moreover, they are mate devices, and if you want to achieve security, you need to put an elderly lady at each entrance to the block of flats. However, such elderly ladies do not resolve this issue. We started looking for solutions. We have understood that the intercoms have to be a part of the home ecosystem and internet-connected. This is the first point. Secondly, we have decided that they need to be equipped with cloud video-surveillance so that our customers could use the video information not only at the current moment but also for seven days due to the availability of a video library, to analyze what was going on, etc. Besides, we considered that for the parent it would be very important to know how their child came home and left it, and they shall be able to connect and see what is going on, especially if they have elderly parents at home. Besides, some people park their cars near their houses. In case of force-majeure, the users would like to know what actually happened. Who caused damage, who hit the car, who stole the bike, in which direction this person headed, etc. But this was only the beginning, later we found out that this information is also important for the cities, when they need to provide access to the ambulance or set up a system for emergency alert. Besides, the safety issues need to be taken into account. Just imagine, a smart camera with video analytics at each entrance. So what happens next? The crime rates reduced by 40% and the crime detection rate improves by 50% in the houses with such video-surveillance cameras.
Is this in theory?
No. It’s in practice. Currently, we are implementing this project in St. Petersburg. I am very grateful to the City Administration for their belief in this project and creating special workplaces for the district police officer and the housing and utilities. On the one hand, it is a state partnership not on the level of a certain contract but on the level of a general agreement. On the one hand, individuals are interested in such a service and would be ready to pay more for this service in future, on the other hand, the city is interested in a very effective solution. Let me formulate a similar task. Is it possible to reduce the police costs by 20-30 percent and raise the crime detection rate 1.5 times?
— Clearly yes, if video-surveillance is everywhere. Do you mean that?
— Yes, it’s one way. This is a chance to improve the quality of work of the police and reduce long-term load on the budget. And all of this is achieved with just a small intercom.
Let me formulate another similar task: how can we improve the lighting of our cities twice, reduce power costs by 50% and curtail emergency rate by 50%?
— Regular lights with movement sensors?
— This is not that easy. Imagine that you have 15,000 lights, and in such cities as Moscow and St. Petersburg there are hundreds of thousands of them. A real artificial intelligence is required to control them. This is not just about switching the light on and off. Because when you switch the light on/off, it wears out the equipment. There are many subtle aspects here. But the truth is that it is possible to apply power-effective lighting systems equipped with artificial intelligence, and ultimately, in addition to saving money for the budget and cities’ lighting, the number of traffic accidents, including running over a citizen, goes down.
— If you want to save — start the digitalization?
Exactly. You know, despite the fact that this is the area of my professional activity, I have realized that digital technologies is the most available method to change the life of millions for the better in quite a short period of time. We have decided to change our position in respect of the state and become a driver for smart cities’ development because the «Smart Cities» is a natural continuation of what we do for our customers in their homes. We have started active cooperation and I said one billion, didn’t I? In 2015, we had 0, and in 2019 we have RUB 1 billion. Each year, we grow by 70% and we don’t plan to stop. The company plans to grow by 100-150% per year in the next 5 years to be able to introduce new innovative solutions in our cities. We feel responsible, we want to be one of the key elements of the Russian digital economy. We want to create new quality of life and earn money on this.