UK
02/09/2013 15:14 BST | Updated 02/09/2013 15:35 BST

Lycamobile CEO Milind Kangle On Building A £120 Million British Telecoms Empire

Lycamobile

Milind Kangle is chief executive of Lycamobile, which offers cheap international calls to consumers using pay-as-you-go SIM cards.

It is also the world's largest 'mobile phone virtual network (MNVO)', a firm which buys radio frequency off mobile phone network operators and works with operators in the 16 countries it serves, including Australia, Denmark, France, Germany, Spain, the UK and America.

Kangle co-founded the firm with group chairman Subaskaraan Allarajah. The Lycamobile brand was launched in 2005, with the first trading taking place a year later, operating under a business structure which sees local national private firms branded by licence as "Lycamobile".

The firm now boasts a £120 million turnover in the UK in 2012 and an estimated €1 billion as a group, with eight million customers and a new customer joining every four seconds. The firm is especially popular with immigrants looking to make calls home. Kangle spoke to HuffPost UK about how he built up the telecoms giant and took it worldwide.

How did Lycamobile manage to improve on the current phone card model?

Most mobile operators tend to offer the best deal to national customers and price immigrant customers at higher rates so they can make more margin. Lycatel's principle was to pass on the bulk of the margin back to the consumer in an effort to change their life.

We have huge economies of scale. We slice the world into multiple segments so from the US to the Australian marketplace whether it's a British expatriate in Spain or in Australia, or in France for that matter, an Indian customer in the US or Germany, UK, France, Australia, we tend to originate calls from there, bring it to our central routing engines and the routing engines make automatic decisions to pick and choose a carrier, of which we have over 250 to choose.

We now buy access from big operators and they see us as a complementary partner simply because they are not able to attract the segment. They historically were not able to communicate the segment in a language that the customer could understand, whereas we have a customer centre operating in 20 languages.

What challenges have you faced on the way?

The main challenges initially were the operators, when they asked questions like 'why should we do business with you?' You're probably a slightly higher risk profile, can you pay your bills on time?

Our industry is not a get-rich quick scheme, nor something we can wave the magic wand and have a business spring up.

What was the hardest part?

The hardest part for me was the technology, because that was the first reason why Subaskaran wanted to bring me on board.

Every now and then when I was away doing a deal, I'd get a call from the chairman saying the network was frozen and has been frozen for 10 hours. That is when I was thinking 'the business is gone', as if it stays frozen for three days, four days, consumers would be demanding their cash back and we don't have the cash to give back to them. There were very hard moments when technology let us down but we've fixed that and set up our own technology company.

How do you feel about the others in your sector?

We are in twice the number of markets that Lebara are in. The mobile business is not for the fainthearted. You need to have deep levels of expertise in every discipline, you need to have the right strategy in place and vision. It's a combination of distribution, vision, brand and customer care.

We are uniquely positioned as the world's biggest full MNVO. We're turning over €1 billion as a group. We're on more than double our 2011 turnover of £88 million.

Is there anything you wish you knew before you started?

Not really. We relish a challenge and my message to younger generation would be not to give up, to be persistent, to persevere, to be strong in your beliefs, to set out a strong vision and to communicate it incessantly.

You need to be optimistic, because if you have a down day which most of us have in our working lives, it's not to communicate that to your staff members, it's to communicate the mission and work hard.