United vision for a south-eastern Odyssey

15 October 2021 | Gareth Willmer

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United Group has made strides expanding in south-eastern Europe in the past couple of years and has now launched a regional wholesale division. Paolo Ficini, CEO of the new unit, tells Gareth Willmer why UGI Wholesale has the ingredients for success

The chance to travel to Europe’s sunny southern climes has been sadly curtailed for many would-be tourists since early last year, yet that has not prevented one operator from expanding its own horizons in Bulgaria, Croatia, Greece and other destinations.

At south-eastern-Europe-focused and Netherlands-headquartered United Group, CEO Victoriya Boklag recently described 2020 as “one of the most transformative years” in the company’s history, with the momentum continuing in 2021. Backed by owner BC Partners, an international investment firm that acquired the company in 2019, United Group has put in place a rapid-fire array of acquisition, consolidation and network-based moves, as well as recording organic growth.

Indeed, since its beginnings as a small cable company in 2000, United Group has made more than 100 acquisitions to morph into today’s multi-play operator of around 11 million users and 14,500 employees. The firm is active in eight countries – Bosnia-Herzegovina, Bulgaria, Croatia, Greece, Montenegro, North Macedonia, Serbia and Slovenia – offering broadband, cable, pay-TV, fixed, mobile and over-the-top services.

Most recently, the company struck a deal to acquire Greek telecoms operator Wind Hellas, enabling it to create a converged operator in combination with pay-TV provider Nova – itself an earlier United Group acquisition under Nova’s former guise as Forthnet.

Such a sequence is in line with other recent moves, including acquisitions of companies in Bulgaria and Croatia, and harmonisation of operations between units. United Group has underpinned this with network deals – partnering, for example, with Nokia for the roll-out of next-generation fibre and mobile network upgrades in south-eastern Europe, including enhanced 5G propositions.

Even before its latest wave of moves, the company’s accelerating momentum was being borne out in its financial performance: in 2020, United Group’s revenues ramped up a massive 170% year-on-year, hitting almost €2 billion.

Wholesale play

Any potential challenges posed by Covid-19 certainly don’t seem to have dented the company’s forward motion. Indeed, United Group has also been able to make strides in one segment traditionally associated with more measured progress – that of wholesale.

This April, it unveiled UGI Wholesale, a new Greece-based unit focused on co-ordinating such activities across the group, with an eye on becoming a leader in that segment in south-eastern Europe, too.

“It’s really very exciting,” says Paolo Ficini, who was drafted in to take the reins as CEO of the new unit, having previously been at Telecom Italia Sparkle, where in the past 20 years his roles included positions heading operations in Greece, Turkey and Eastern Europe. “It’s not every day it happens that you have the possibility to have a new company dedicated to wholesale business that was not here before.”

And Ficini says that despite the group’s broad coverage, it has had the feel of a versatile and fast-moving player in the time he has spent in the 40-strong wholesale business so far. “The feeling is not the feeling that you’re working for an elephant,” he says.

Aside from having an enthusiastic team, this comes partly as a result of the company having a strong belief in the direction it is taking, Ficini explains: “If they believe in the project, you feel it; when they are convinced, the decision is very quick.”

Path to a new business

Taking the discussion back to how the new business came into being, Ficini says the strategy marked a logical progression alongside United Group’s general expansion and the local wholesale assets it picked up along the way.
Pondering this situation after leaving Sparkle in late 2019 and starting collaboration with United Group externally in early 2020, he saw the potential for creating a combined unit that could cater effectively as a leading player in the wholesale market and provide transport in a key inter-regional transit zone.

Doing so would have a clear market benefit, says Ficini. “This region is characterised by fragmentation of players. There are not many that can offer one network and one contract, and can cover all this region,” he says.

Approaching top management at United Group to propose the idea of a regionally focused wholesale division, he believes he caught the wave at the right time, with the company having achieved the right critical mass, alongside the fresh moves it was making – such as its buys of Forthnet and leading Bulgarian telecoms provider Vivacom.

“Honestly, I would like to tell you that I’m a genius, but this was quite a logical step,” says Ficini, who adds that the group already had most of what it required to hit the ground running and that the remaining need was to harmonise these assets. In fact, he insists, it would have been harder not to take the plunge.

Squarely aligning with his description of the firm’s ethos, the wheels were thus swiftly set in motion and UGI Wholesale was born, with Ficini installed as CEO.

Extending routes

The company is now focusing on boosting and filling in coverage on routes, with United Group having completed backbone infrastructure all the way from Athens via its markets in south-eastern Europe to Vienna, Austria, and working on connecting this onwards to Frankfurt, Germany.

In addition, it is diversifying cross-border connections between countries to give it new unique routes, and plans to connect Slovenian capital Ljubljana to Milan in Italy, as well as construct a diversified network from Athens to Milan via submarine cable. Furthermore, UGI is planning to build a network across North Macedonia to give it a more direct route north from Greece.

The company currently has a fibre-optic network extending thousands of kilometres, with access to a market of more than 40 million people. It also has data centres in Bulgaria, Slovenia, Serbia and Greece.

“Our advantage is we don’t start from zero,” says Ficini. “We put together what we already have, and we add on top something because of the improved operations and improved attractiveness that we can represent in the market.”

To co-ordinate functions across the group and offer end-to-end monitoring, UGI is establishing a network operations centre in Belgrade, Serbia. It already has the facility for its SBB cable operator, and Ficini expects it to be fully converted for its new purpose by the end of the year.

He says that because of its depth of operations, UGI Wholesale is able to offer a strong mix of both regional and local services to its customers, while also providing a solid underpinning and synergies for the group’s own range of activities in different countries. The company is offering customers a single point of entry for a range of data, roaming, mobile and wholesale voice services, including Ethernet lines, MPLS Layer 3 connections and local internet services.

The operator is also providing termination to its own mobile and fixed networks, and to worldwide destinations using partner connections. In addition, it is making its networks available for growing IoT and M2M traffic, and there is the potential for MNOs and MVNOs interested in its coverage to gain access to its SIM profiles.

Going places

With this combined range of offerings and footprint, Ficini believes that United Group has the edge on its wholesale competitors in the region.

And he says that its presence in markets such as Greece is key as a gateway for demand from the Mediterranean and Middle East. Infrastructure in general is also expanding in the region amid digital transformation, widening the opportunities. This includes the new IONIAN submarine cable being constructed between Italy and Greece, Microsoft’s plan to build new data centres in Greece, and the emergence of 5G.

Meanwhile, Ficini’s previous long-standing experience from Sparkle stands him in good stead for the road ahead in terms of rapid access to a network of contacts and knowledge of the region.

“It was quite easy for me to establish contact with all the region and the players,” he says.

Ficini believes the company has all the attributes to be at the forefront of wholesale in the region – but the main challenge now is to synchronise all the elements to make it work in harmony, and then be ready to move with the demands of a continuously changing market.

“The important thing when you have all the elements is that you are able to move according to what the market wants,” he says. Given his description of United Group as a flexible and quick decision-maker, he believes the company has “probably the most important quality” to fulfil those needs in our changing world.