Axiata Group CEO's perspective on future of telecoms in post Covid-19 world

Twimbit had an incredible opportunity for a detailed chat with the Group CEO of Axiata, Tan Sri Jamaludin Ibrahim. Axiata is one of the region’s foremost telecom service providers, with over 150 million subscribers and operations in 9 countries. The conversation covered a wide range of issues such as COVID-19, 5G, human capital development as well as opportunities for growth and innovations in telecom.

Key Takeaways

Globally telecoms as an industry is best in class in its response to the pandemic.

  • They have made cash donations, helped consumers with providing additional free data.
  • Networks have remained quite resilient despite the traffic spike.

Governments, investors, customers – all realize the importance and opportunity that is available to telecom service providers to shape the new post Covid-19 normal.

Near term results could be challenging, long term outlook is very positive.

Attracting and grooming talent will be key for long term success.

Will force telecom companies to accelerate their network and cloud investments.

COVID-19 and its implications on telecom service providers

The implications will be different during the lock down, 6-9 months after the lock down and in the longer term

Current
  • 15 to 40 percent surge in data traffic, puts additional pressure on the infrastructure.
  • Topography of the traffic has changed from commercial to residential.
  • Peak periods have changed –used to be from 7 to 11 in the evening, has changed to now be from 12 pm to 4 pm (this does vary from country to country), there is a flatter curve of transition from afternoon to evening.
  • Applications that consume traffic have changed – Netflix and video consumption have gone up even during office hours!
  • We have brought forward network upgrade investments by a quarter; software upgrades are happening on-the-go, hardware upgrades are proving to be more difficult due to movement control restrictions.
  • The challenge is to understand if the change in the customer usage patterns will be permanent or temporary, and if this change justifies increased investments.
  • Near term there will be an adverse impact on revenue and profitability.
Mid to long term
  • Telecoms is at an incredibly sweet spot.
  • Covid-19 will accelerate digital transformation, particularly amongst SMEs.
  • There will be strong growth for bandwidth as well as solutions (horizontal and vertical industry specific applications).
  • Partnerships with the likes of Microsoft, Google will be essential building blocks for long term growth.
  • We will evolve to become a solution provider and am confident telecoms will emerge as the darling of investors again.

Axiata’s response and role during Covid-19

Free data up to 1GB/customer/day.

Deferment of payment is being offered to select customers and dealers who might face challenges.

Programs to help selective customers based on analytics and insights.

Validity period of the top-up cards for pre-paid credits has been extended.

A RM150 million loan program to support micro SMEs in Malaysia was launched as early as 25th march, 2020

  • Up to RM10,000 of loan, tenure is from 3 months to 18 months 3-minute approval of loan applications once the information is submitted
  • Disbursement within 48 hours
  • Will continue endeavour with government support, despite possibility of non-performing loans
  • Lessons learnt – increase the quantum of loan per SME, manage cybercrimes as there is a surge in scams

Every subsidiary of Axiata Group has donated between US$1 to US$1.5 million in respective countries to support various relief funds.

Every operator is developing software to help with tracking and tracing of infected patients and supporting the governments in respective countries.

Reflecting on Axiata’s strong performance in 2019

The biggest improvement is driven largely by XL Axiata in Indonesia

Celcom– revenue growth is slightly below market, but EBITDA and profits are much better than the competition.

All OpsCos achieved, double digit growth in PATAMI.

Progress on the growth initiatives

Digital businesses

Investments of US$270 million (9 companies) have been made todate in digital businesses; today this is valued at US$640 million. The digital investments include many initiatives which have been folded into operating companies.

Enterprise business

Enterprise business is making progress, growing faster than consumer business but still not showing double digit growth. 2021 should be a good year for the enterprise business largely driven by digital transformation initiatives of businesses in this region.

On partnerships and collaboration

  • Facebook investment in JIO Platforms is a very strategic move – a merger between OTTs and telecom service providers, and a beginning of more of such partnerships.
  • This will give impetus to the telecom service providers to expand beyond broadband into more digital services.
  • We are excited about the prospects of being digital bank and hope to address the segments that the traditional banks have not focused much on.

5G preserve or accelerate

  • Accelerate 4G.
  • Dilemma between conserving cash or leveraging it as a catalyst for rebound.
  • We recognize that there is a strong opportunity to build a growth play.
  • Still evaluating our next steps.

Talent strategy– a zigzag career

It is challenging to attract young talent to telecom companies. We realize the importance of talent to propel Axiata into the future. We have developed a threepronged value proposition to attract talent. We want them to join us for not just one but all three benefits:

  • A competitive compensation.
  • A well-rounded development – we are akin to an applied university – a way to see how technology gets applied with a zig-zag career development path.
  • An excellent environment – both physical and otherwise.
    • Global experience – with 41 nationalities
    • Great physical spaces
    • Collaborative work culture

Advice to aspiring CEOs

Be Agile, Be Digital but not too passionate
Mindset

To aspire to it, plan for it, but not get too hung up on it.

Agility

To develop a multitude of skills and move across departments such marketing, strategy, technology, finance and others.

Digital Skill

To build skills essential for digital business such as data science and new business models.

Telecoms is at the epicentre of all the innovation. We are learning fast. Through partnerships and collaboration, in the years to come, telecoms will emerge as the darling of the investment community again.

Tan Sri Jamaludin Ibrahim, President & Group CEO of Axiata Group Berhad

Topic:

Telecoms Transformed

Telecoms industry insights, trends, challenges, and transformations

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