Sunday seems so far away for Ehrlich

PUBLISHED : Monday, 20 January, 2003, 12:00am
UPDATED : Monday, 20 January, 2003, 12:00am

CRAIG EHRLICH was never likely to opt for a quiet life after leaving Hong Kong's brash young telecoms upstart Sunday Communications. As group managing director of Sunday, Mr Ehrlich helped create a company with an image of youthful vigour and energy, turning it into one of the city's most identifiable (though unprofitable) brands.

A year after stepping down as Sunday's top executive, the 46-year-old is no closer to his day of rest.

Not content with sitting on the boards of companies in China, the United States and the Philippines, Mr Ehrlich has also taken on the mantle of global industry ambassador.

At the start of this year, he took up the chairmanship of the CEO Advisory Board of the GSM (global system for mobile communications) Association (GSMA), which represents more than 636 mobile companies with a global subscriber base of close to 700 million. He is in line to take over as the body's chairman next month.

Mr Ehrlich is now dedicated to the mission of unifying the industry behind a set of common principles and objectives.

'We are promoting the interests of our industry. That is the sole purpose, and we have not done it in the past,' he said.

'I accepted this position only under one condition - I would work to change the governance structure of the organisation because I believed the issues [around our industry] were so serious, so big and we did not have an organisation that could promote our interests or present our position in a proper way.'

While Mr Ehrlich's skills as a publicist are undisputed, some might question his authority to speak on issues of governance.

He came under some flak two years ago after Sunday's board gave itself a fourfold rise in pay. That was despite posting a HK$466.56 million net loss and seeing its share price tank from its initial public offering price of HK$3.88 in March 2000 to less than 60 cents by the end of the year. The top-paid executive - almost certainly Mr Ehrlich - received more than HK$29 million, up from between HK$8 million and HK$8.5 million the year before.

Mr Ehrlich is unrepentant. 'I have nothing to be concerned about. The issue is Sunday, it is not me personally - why bring it up with me?' he said.

He stepped down from the top post at Sunday at the start of last year in what he described as an 'amicable departure', handing over to operations-focused chief executive Bruce Hicks.

In his new capacity, Mr Ehrlich keeps in close contact with many of the world's most powerful telecoms executives, presiding over regular conference calls between the likes of Vodafone, NTT Docomo and China Mobile - all members of the GSMA's 21-strong executive committee. 'With these guys you have to be respectful of their time, so I conduct the meetings with military discipline. Here is the issue, here is the background, here is what I think we should do, what is the feedback, what are the questions. Okay, do we have support? Move!' was how he described the process.

It is a leadership role he takes seriously. The mobile phone is one of the most widely used consumer products in the world, and GSM is the dominant technology. There are more than 800 million people using GSM phones around the world, far more than use rival code division multiple access (CDMA) or personal communications service (PCS) systems.

The role also demands diplomatic skills and cultural sensitivity, as he needs to mediate between French, German, Chinese, Japanese, British, American, Canadian and Mexican executives, getting them to agree on common objectives.

'It's like being Kofi Annan [head of the United Nations], because you are trying to facilitate, lead, arbitrate, negotiate with all these parties, who should have common interests, but you know sometimes it does not always work that way,' Mr Ehrlich said.

The stock market downturn has changed the dynamics of the industry. Profitability has become the main concern of global operators, with the technology bust having ended the boom-time days of easy money and subscriber growth at any price.

Leading mobile operators, mostly European, took on billions of dollars in debt to fund the purchase of third-generation (3G) licences during the boom, and have been struggling to stay afloat. While the market environment may look bleak, the downturn has had a silver lining, according to Mr Ehrlich. It has promoted a spirit of unity as companies recognise they must work together to overcome the industry's problems.

'If this organisation had been put together earlier, with all of its potential strength, let's say, three years ago, before the 3G auctions started, we could have lobbied for a better solution to the question of how to allocate 3G licences.

'We might not have been able to stop auctions, but we might have been able to minimise the damage to the industry.'

This was why the GSM industry needed a strong trade organisation. Few on the GSMA's advisory board disagree.

'Craig's admission is a good move,' said Hubert Ng Ching-wah, chief executive of CSL, the No 2 mobile operator in Hong Kong and also a member of the GSMA. 'Now that we have hundreds of members, it should not be run like a loose organisation.'

Operators around the globe have been hoping to establish a common technology standard so that businessmen travelling around the world will be able to use the same mobile phones wherever they go.

With 3G networks making their debut, this dream is coming closer, as most next-generation services will use the wideband-CDMA technology, which is deployed by members of the GSM Association.

A key task this year will be the creation of a uniform content platform, which will enable 3G content to grow quickly and users to access it easily.

'We need the ability of companies who have content to be able to introduce the product very quickly. We need a very standardised platform, so that if you go to Orange in France, you go to Hutchison in Hong Kong, or you go to SingTel in Singapore.'

He makes no secret of the fact that operators will want a bigger say in what handsets should be like, to leading makers such as Nokia, Motorola and NEC.

'We have let the vendors tell us what to do, rather than telling them. The big success story of GSM is 12 years ago when we said to the vendors, this is what the GSM standard is, you build with it.

'We've let that slip in the last few years. That's why GPRS [General Packet Radio Service], MMS [Multimedia Messaging Services], SMS [Short Messaging Services] and 3G have taken longer. Because we didn't take the attitude that here is what it should look like, then do it,' Mr Ehrlich said.

Such talk underlines how Mr Ehrlich - a member of the GSM Association for only eight months - is intent on shedding the body's reputation as a weak negotiator and turning it into a powerful lobbyist for its members' interests.

Mr Ehrlich joined the association after being approached by chief executive Rob Conway two years ago.

'He said: 'Do you know what the GSM Association does?' As soon as I said no, I thought to myself there was something wrong with that.

'I had experience in trade organisations in the United States in Cable TV in my old career, so I do understand them. I didn't know anything about the GSMA. When I thought about it, I realised that [this meant it] was not doing a great job.'

Mr Ehrlich pitched in as an informal adviser to Mr Conway before being invited to join as the deputy chairman of the CEO Advisory Board in April with a joint mission to overhaul the body's structure. 'It was taking all these companies, for the first time, at the senior level, the CEOs of all these big companies, getting them to buy into changing the governance structure, and on establishing it as a worldwide trade organisation, to take on as I keep saying strategic and commercial issues. It was quite dramatic,' said Mr Ehrlich.

It has also been fun. 'I was on the phone this afternoon with the CEO of a big Taiwan company whom I know extremely well. They had a mobile team that used to work for Hutchison. The guy on my board from Orange I used to work with. So all of a sudden, I get it in order, and I know people. There are colleagues of mine from other days in my life. It's kind of fun to start working with them again on the global level.'


Craig Ehrlich

is the interim chairman of the GSM Association. A former group managing director of Sunday Communications, he is a 24-year veteran of the communications industry. Mr Ehrlich came to Hong Kong as a managing director of Hutchison Cablevision in 1987, spending four years at Hutchison Whampoa during which he started up telecoms businesses in 10 countries. He is a board member of China Aerospace Science and Technology and sits on the board of a wireless venture Roamware and Philweb. Mr Ehrlich has a degree in political science from UCLA and a master's in urban planning from Occidental College.