Struggling with the buffering on your screen? So is your internet service provider! - An interview with Managing Director of Worldlink Communications; Mr. Dileep Agrawal

“Internet”: In a globalized village that we live in, this word today has become synonymous to connecting or even linking people. In the country that we live in today, the word has become synonymous to slow, dilly dally or even buffering and in some contexts even “kasto jhyarjhyar aawaj aayo!” (The sound is disturbed). Before the article even initiates nagging about how slow the internet in Nepal is and the audience nods their head in agreement, let the author take you to a different location at a different time.

“Love the government but don’t marry them”

This is one of the famous quotes by Jack Ma; the founder of Alibaba. The ecommerce founder referred this quote after he lost his opinion among the board members in a government based joint venture project named China Telecom (NYSE:CHA) which was initiated before Alibaba. The location was China and the time was the years in between 1995 and 1999.

Eighteen to nineteen years later, Nepal stands among the international countries with a proposal of 13% tax levied on internet usage to public. Although the 13% tax exercised on internet has been redeemed, yet the incident came into notice of every citizen; bringing criticisms to the newly elected government. The comparison between these two contexts at two different time period of two different economies demonstrates that we are at that point or may be even behind, where economies like China was eighteen years ago.

The 13% tax levied on internet was a major shock to the already price sensitive internet customers of the country. In this periphery when customers are concerned about the cost associated with using internet and government planned to tax the internet usage, team of ShareSansar was inquisitive to understand the views of internet service providers. So, team from ShareSansar (Rachit Agrawal and Dheerusha Tiwari) visited Managing Director of WorldLink Communications Private Limited; Mr. Dileep Agrawal to understand how they made it to this day.

A biochemistry student from Bates College, United States; Mr. Dileep Agrawal coined the term “WorldLink” when he was on an airplane travelling back home with the vision to connect Nepal to the entire world. Internet was emerging in the United States, Amazon was just established, and educational institutes identified the need of internet. However, there was not even email service in Nepal. Back in 1995, in his summer vacation to Nepal, Dileep Agrawal established WorldLink Communications Private Limited so that families in Nepal can contact to families abroad through email services. Back in time, internet was expensive and all that the team of Mr. Agrawal can do was dial up to the international server continuously so that people in Nepal could send and receive emails. 

With zero balance in pocket, yet hopes held high, it took two years for WorldLink to transform itself from an email based service provider to an internet based service provider. Mr. Dileep Agrawal attributes two major reasons for this leap.

“One of the prominent reasons was that the volume of emails that we received was increasing and we might not have been able to handle them with the existing status. Secondly, in 1997, Mercantile (a competitor of WorldLink) launched internet service so; it came up as a competitor pressure.”  WorldLink initially was an experiment to Mr. Agrawal. He was more passionate to understand what works and what does not in the tech industry. Today, 23 years later, his experiment is an enterprise that connects the world.

How has the journey of WorldLink been?

If I look back, 23 years is a long time. Initially, I and my team had no clue about business. We did not know how to manage finances but we grew very fast. Initially, when there was no internet, people relied upon us. All they were provided was email service with an email address. So, if our server did not function, no email transactions would take place. Post the email services, people were in need of internet and they reached out to us. On that note, there were many people who doubted us. “What if WorldLink gets closed tomorrow? What will happen if we get stuck?” A lot of people were wary if we will sustain or not. Despite all of the suspicions, a lot of non-business users undertook our service and we scaled up. As is it said, with growth comes challenges. In our early days, as we were growing, we needed funding. No banks were willing to provide us loans so, we struggled arranging capital and managing cash flows. Then, customers did not want dial up services. They instead opted for faster internet or a 24/7 connection. Years of experiments helped us finally understand what would work in Nepal. In other countries, government usually sets up infrastructures for private players but in Nepal, the only thing government had set up was a license.

To be honest, we tried out many things. We have tried things that people would not do globally. And, a lot of times, we failed. Our brand got deteriorated for a time being because of the same.

In the process of establishing ourselves, we failed a number of times yet we remained in the game. Many companies that started along with us such as Merchantile, Infocom, Unlimited don’t do businesses anymore. However, we have been growing by 60-70% for past 3 to 4 years. In the recent years, we have been established as no. 1 ISP in several parameters such as customer’s base. Although, we went through several ups and downs, I believe, we are at a position where we are one of the strongest companies in Nepal.

What has been the mantra to be established as no. 1 ISP in Nepal?

We are established with the vision to connect everyone, anywhere, all the time. Money comes later. We are more concerned about how and where do we connect rather than how do we make money. Our focus is on delivering better services. Once a better service is delivered, customers are satisfied, and then money will follow you automatically. So, the mantra is focus on better quality rather than better money.

When did WorldLink take that leap or a turning point?

The major reason that we are here today is because we innovated continuously. We innovated in technologies and introduced differentiated products. We were the company to introduce night surfing in Nepal. In our initial days, we always tried new and different things. A lot of them did not work but what worked paid off well.

One of the biggest decisions that we undertook is that we decided to build fiber network all over the country. We even reached to small places of the country that lacked proper infrastructures. At that time, we believed, if not today, tomorrow the prospective clients will demand the service. We took an exposure of Rs 130 crores during that time. Every year, we invest a certain amount. In this regard, we are investing Rs 240 crores this fiscal year. We are an aggressive business. The day we will stop investing that day WorldLink will stop growing and eventually, die. So, one of the biggest decisions has been to take the leap of faith that we can build this.

What is the penetration level and profit status of WorldLink as of last FY?

When I talk about profit status, it might not be that good. I can’t give you an exact number as I am not someone who drives for the figures in profit. I am more focused in increasing penetration level and providing a better quality.

When it comes to penetration, it has grown. WorldLink has around 30% market share and we are the largest among internet service providers. We are followed by ADSL. Similarly, ADSL is further followed by Vianet Communications. However, the ratio between WorldLink and Vianet is around 1:4 in terms of customer base. Thus, we are largest by a huge magnitude.

How difficult is it to retain employees given the company is tech related?

We don’t have a problem of employee retention in the non-tech field. When it comes to the tech field, it is challenging. This particularly is because there are a lot of opportunities. Besides, WorldLink does not perform a lot of high technologies work now. In the initial years, we used to involve ourselves in a lot of innovation works because we could not afford to purchase technologies from vendor. However, at the present, we buy technologies from vendor as it a better model for us to grow. Although there is a challenge in retaining our tech based employees, we take ourselves as a training school. We take in fresh graduates, train them, they work for us for 2-3 years and they leave. As a company, we are completely fine with this.

What values are delivered to the employees?

We have certain core values that we try to deliver. I strongly believe that if we don’t try new things, we won’t grow. As a company and an individual inside this company, employees are expected to be constantly willing to experiment and be ready to fail. We also have a very strong customer focused value. As a large company, we have customers of different income status, demography, geography. Pleasing each one of them is not as easy as it might sound but we want to serve best to each one of them. Moreover, inside the company, we do not stress employees with undue pressure and rather implement a team support attitude among each other. When I come across old employees, they often tell me “There was no undue pressure to perform in WorldLink and we enjoyed our time the most.”

How do you ensure the same values are shared to customers?

Our customers care about the quality of service, quality of support and the price they pay. At WorldLink, we try to see how we can optimize these three things in the best possible way. For example, this fiscal year, we will be investing 240 crores in company. With that amount, we could have set up three beer factories or probably a 5 star hotel. However, our concern is in this business so, we will invest the lump sum at WorldLink for better network with better infrastructure. The quality of service that we provide competes easily with global standard provided that we use the same technology.

There are still complains regarding poor internet service from several ISPs. What is your say on it?

I do acknowledge that the overall internet experience in Nepal is not as good as the global standard. There are few reasons behind it:

First and foremost, the reason can be attributed to the quality of wiring that we need to do on the electric poles. WorldLink or any other internet service provider has to use the same electrical pole. There is no such regulation as who can use the pole and who cannot. As a result, there are a lot of sagging wires. The road construction keeps on happening while the poles keep on getting shifted. The problems citizens face because of lack of water, bad roads translate into the slow pace of internet as all these infrastructures go through the same route to households. Our own infrastructures are being our own limitations.

If you ask me, “why not an under cabling?” I will definitely do it but I cannot do it. The road expansion and construction happens within months so, if someone digs in and cuts the cable, the internet will not be fixed for 2 to 3 days. As of now, it can be fixed at least in 3 to 4 hours. The wiring has to be managed and controlled for a better internet experience.

Besides the infrastructures, the mismatch between customer’s affordability and router capacity is also an issue. We are joining fiber to the customers’ house but customers use Wi-Fi to access the internet. The quality of Wi-Fi in the house is becoming a huge limitation. The Wi-Fi router that we provide can serve three to four rooms. It cannot cover a huge house with a lot of devices at a time. In this regard, people need to invest in good Wi-Fi routers, but as customers are price sensitive, they are not willing to purchase expensive routers.

How do you convince prospective internet clients in rural areas?

We don’t have much presence in rural areas. We do have customers and coverage in rural areas and they are happy to take at least something. However, we don’t expect to serve the rural areas with the technology we have. We cannot pull wire to everybody’s house as it is too expensive. Both outreach and revenue come with a tradeoff. However, we have reached in 63 to 64 districts as of now.        

Five years down the line, will you be present in the rural areas?

There are a lot of opportunities for ISPs in rural areas. We aim to reach the rural parts but the technology that we use to cater urban residents can’t be used for the rural areas. It has to be wireless. Government should be willing to provide wireless spectrum frequency in order to connect the rural areas with internet. The urban area is almost near to saturation and the growth opportunities now lie in the rural areas.

How do you perceive the ISP industry in Nepal?

Everyone wants an internet and everyone wants to be connected so ISP industry is definitely growing. As of now, there are still mobile operators where people use mobile data package for connection. Mobile data is always capped by some charges. There is always a perceived cost to use data package. With mobile data package, one is hesitant to use internet freely. Such issues are not found in our nature of service. So, families and businesses will always prefer broadband over data packages provided that the service is available in their locality.

What is the status of WorldLink’s paid up capital? Is the company thinking to go public?

I can’t exactly tell the paid up capital however, it has increased significantly this year.

To be honest, we do not want to go public. We have to convert into a public company by law which we would do however; we do not have any intention to be listed on stock market. The first reason for this is that the stock market is depressed in Nepal. Secondly, we are not a company that gives high dividend to shareholders. Investors in Nepal are used to high dividends from banking sector. Dividend is what drives their purchase. However, we follow standards aligning with Microsoft and Amazon where they keep on reinvesting rather than giving dividends. WorldLink will keep reinvesting to continue growing in the market so; we might not be among the preference of investors in Nepal.

Finally, the laws around listing your shares based on premium are still restrictive in Nepal. Although policies might have stated a company can calculate their price based on net worth, Nepal’s stock market would calculate net worth based on assets and liabilities. For tech companies, this method is not suitable. In fact, in other countries, multiple of EBITDA or discounted cash flow (DCF) are used for such calculation. Thus, until and unless Nepal adopts global practices, I don’t think we will be listed.

Does that mean the tech startups will also be demotivated towards stock exchange?

They won’t be motivated until and unless valuation is done as per the global practices.

Do you think government’s recent initiatives are supporting to the industry?

The government talks about digital Nepal but I wonder if they really have a clue about it. Government taxed broadband by a whopping 13% within a year. I wonder what impression the government will make if such policies are spoken aloud in a global stage. In this age, everyone is encouraging internet. Efforts are being made to make it accessible to everyone. Imposing tax on internet at this point of time makes no sense. It is very counterintuitive to what government says and what it does. Such policies rather raise question marks on government’s plans on digitization.

I hope government understands such tax is against the economy. When government imposes unnecessary taxes on businesses, they will cover up their expenses from public. At the end of the day, for a business like us, the market size will reduce whereas for the public, they will have to incur the cost. 

If WorldLink wasn’t established at that point of time, would you enter into the same industry now? Which industry would be under your preference?

It would have been very stupid to do it today. There are already established players in the market and government has no vision towards the industry. I can’t remember even one thing that the government has done in these years to support the broadband industry. The only support I received was in the form of operating license. In terms of prospective clients, the urban areas are mostly saturated. However, rural areas may have opportunities.

The industry you want to choose depends upon the hard work you want to put into. I see agriculture and tourism as promising in Nepal. People in urban areas are not as poor as they seem. Services that cater urban areas should succeed. However, if you are going for a mass manufacturing or servicing a bigger mass, I should caution you then and there. While I have met supportive clients, I have also met clients who are ungrateful no matter how much you put into. Although our culture and religion have taught us to be grateful and thankful, we have are complaining and discontent. We are often ungrateful to what we have. So, serving the mass can be challenging because the customers often want cheaper products at a global standard. This can be very challenging to enterprises in Nepal.

What is your say to youth?

I see a lot of youth in urban areas who have inherited ancestral properties. This is an evidence of future financial security and they don’t have to worry much about their day to day living. However, I urge the youth to take more risks. Until and unless, more youths undertake risks by venturing into business, the economy won’t flourish. Even if 100 youths take risk and only 4 to 5 succeed, it will add value to the economy.

In the author’s experience, it is not often that the CEOs in Nepal are seen with books in their office shelves. However, the author came across books such as Chairing the Board by John Harper, Essential Drucker by Peter F. Drucker, Scaling up: How a Few Companies Make It… and why the Rest Don’t by Verne Harnish in Mr. Agrawal’s cabin. At the end of the day, it’s the book that shapes a mind and it’s the mind that shapes a business. With a number of books that related to management practices, any visitor could sense Mr. Dileep Agrawal is wholehearted in his undertaking and is indeed willing to connect Nepal to the world. The only challenge is that the institute that is willing to connect us to the world is discouraged even after almost 23 years of fighting alone. We all were infuriated with 13% taxation on our internet usage. Little did we think how the internet service providers have been operating all these years without a single incentive from the government. With constantly nagging customers like us and unwilling government, how did an ISP sustain two decades in the economy? With rising e-commerce and online startups but deteriorating infrastructures, little did we think how an ISP managed to console themselves for a bright future. 

 Finally, quoting the last lines in the end pages of Mr. Dileep Agrawal’s  favorite book Scaling Up- “Success belongs to those who have these two attributes: i) An insatiable desire to learn ii) An unquenchable bias for action”, we wish all the luck to Mr. Agrwal and his family at WorldLink for their upcoming endeavors.