Daniel Kurgan, BICS: The wholesale mastermind
14 November 2012 | Guy Matthews
Daniel Kurgan runs one of Europe’s most successful wholesale businesses. Here he talks to Guy Matthews about his pride that a relatively small Belgian company has been able to make such a worldwide impact.
When you think of the major European nations, Belgium is not normally the first that springs to mind. Be honest, it’s not even the biggest economy in its own tiny corner of the continent.
All the more surprising then that it has managed to produce one of the most successful and influential names in the global wholesale telecoms firmament.
Belgacom International Carrier Services, better known as BICS, is a leading player in a number of fields, from wholesale voice to mobile money.
CEO Daniel Kurgan takes unashamed satisfaction from the fact that a relatively small Belgian company has been able to make such a worldwide impact: “Yes, I feel pride that a Belgian company has achieved all that we have, of course I do,” he says. “I feel proud for the team and myself.”
He points out that the Belgian economy, like so many around Europe, has not had the greatest time of it over the past year or two: “It’s good then that we’ve been able to create hundreds of new jobs, most of them in Belgium,” he enthuses.
“It’s not exactly the cheapest country in the world in terms of labour costs, but it’s been important for us to be able to develop expertise, and with that to create employment.”
Kurgan says BICS has around 50 different nationalities on its payroll: “We’re very, very diverse in our employment policy – both worldwide and in Belgium,” he claims. “Many of our Belgian employees have crossed oceans to come and work for us.”
A BICS decision
Kurgan started in Belgacom’s Carrier Division, as was, in 1997, and was given the CEO role at BICS in 2007, so he has played at least some part in the all the key events that have shaped the operation.
He explains that where BICS is today is the result of three major decisions: “One was to focus on the mobile market early in the last decade,” he recalls. “For more than 10 years we’ve been running a one-stop shop delivering an international wholesale offering for the mobile industry.”
Secondly, a timely move was made to push into a series of emerging markets, before emerging markets were trendy. “We went into Asia in 2000, Dubai in 2004, ahead of others and often ahead of market liberalisation,” says Kurgan. “We’ve been the first to provide a hub in a lot of small developing economies.”
The third and perhaps most important decision was for Belgacom to spin off a separate wholesale entity with its own governance and decision making, standing or falling by moves made by its own board.
BICS has from the start been able to make its own capex decisions, and pursue its own strategy in a focussed manner. Most of BICS’ peers, like France Telecom and Deutsche Telekom, run wholesale units very much as subsidiaries of a greater whole.
“I’ve got great respect for those operations, don’t get me wrong, but they are run as part of a very big company,” says Kurgan.
“When capex is needed, they have to compete with other calls on that money from different parts of the organisation. Maybe that money is needed for a broadband network or some cell towers. We’re not competing with other interests, and that flexibility has been a big difference for us, especially over the past six or seven years.”
Kurgan says BICS is trying to carve further differentiation for itself out of new market opportunities, against the background of a wholesale sector under severe margin pressures.
“There’s our IPX story,” he says. “We’ve been a leading proponent of that type of model for a while now, for example with our signalling process. IPX is a natural evolution of interconnectivity, and we want to be a leader in that.”
Not, he insists, that the company is abandoning its stake in international wholesale voice: “It is a high volume, low margin business where critical mass is essential,” he says. “There’s no real options here thanks to margin pressure from over-the-top providers (OTTs) and others. Plus the voice market is not exactly growing anymore.”
He plans to keep up the pressure in the area of mobile services as well, which, while also competitive, is at least a growing sector.
“We’re in a leading position in areas like roaming and messaging,” he believes. “Our aim is to come to customers with more products and services and move up the value chain beyond pure transport. We want to work to stimulate mobile data traffic, to push fraud protection and develop firewalls, basically a whole range of value-added mobile data things that meet customer requirements. We’re also working to develop a leading MVNO proposition.”
Kurgan’s competitive streak does not leave him outside of working hours, it seems. “I’m very much into sport, and I’m still a good tennis player, taking part regularly in competitions,” he says. “I love Alpine skiing too. Most of all though I’m a bridge player.”
He’s been playing the game at top level for about 20 years, and was in the Belgian national bridge team two years ago for a Europe-wide tournament.
“I don’t think there are that many other bridge players in wholesale telecommunications,” he concedes. “I love the game for its intellectual challenge and for its unlimited possibilities. It takes quite a bit of dedication to be good at it.” The same could easily be said for global wholesale.
BICS - key facts
History: BICS was conceived back in 1997 with the creation of Belgacom’s carrier & wholesale business unit, Belgacom ICS. In 2007, Belgacom ICS was rebranded to BICS and deployed a suite of roaming services.
Network: BICS owns a 40Gbps-capacity, MPLS-enabled pan-European network which extends into nine European countries. The company’s international network includes over 500 direct connections in over 160 countries.
CEO: Daniel Kurgan was appointed CEO of BICS SA/NV in March 2007.
Customers: BICS has more than 700 customers, including over 400 mobile data customers.
Ownership: BICS is 57.6% owned by Belgacom, 22.4% owned by Swisscom and 20% owned by MTN.
Products and services: BICS products and services include: voice, roaming, IP transit, SMS transit, signaling, HomeSend, Carrier Ethernet, 3G video telephony, wholesale bandwidth.