CHALLENGES AND OPPORTUNITIES
Today, and throughout the next phase of our growth we will face
several challenges in our business:
1.
Unrelenting Data usage growth of over 50% per year moving
forward, challenging traditional network investment economics
2.
Divergence between revenue growth and data consumption,
requiring significant unit cost reductions in service delivery
3.
Sourcing digital talent and achieving full digitisation of our
business processes and culture
4.
Defending our direct relationship with our customers while
monetizing our partnerships with Over-The-Top (OTT) players
5.
Cost pressures from intensified spectrum fees, regulatory costs
and industry targeted taxation in all our markets
However, the current industry landscape also presents some highly
attractive opportunities for us:
•
Smartphone penetration topping 50% and growing to 100% by
2020, driving exponential increases in demand for digital services
•
Social Media and OTT adoption growth of over 100% per year in
many of our markets
•
The Mobile First Internet revolution, where consumers are using
their mobile devices as their primary device for all forms of
communications and lifestyle needs, and increasingly to purchase
goods and services
•
The Internet of Things (IoT) and Artificial Intelligence (AI)
revolution which hand-in-hand will see hyper connectivity and
communication between personal devices, wearables and
specialised applications in many aspects of our lives
•
Augmented and Virtual Reality coupled with Ultra-High Definition
(UHD) video, offering immersive experiences in education,
entertainment, healthcare and business
AXIATA 3.0 – OUR LONG-TERM STRATEGY
We have developed a clear long-term strategy that takes into account
the opportunities and challenges we face in the current operating
environment, and will take us from where we are today as a Regional
Champion telecommunications operator to realise our Axiata 3.0
vision and digital enterprise model by 2020.
Firstly, we have defined our Axiata 3.0 Core Business composition as
the foundation of our strategy, to which all of our strategic initiatives
relate:
•
Digital communications and connectivity
•
Enabling infrastructure and platforms; and
•
Digital applications and services
Secondly, centred around our Core Business are four main pillars of
our Axiata 3.0 strategy:
1.
Aggressively Transform the Core
We are digitising every aspect of our processes, organisation
and culture from marketing through to distribution, service
delivery and customer care, to enhance our agility and reduce
our cost structure. We have also instituted a Data Leadership
culture which will ensure delivery of the best data network
experience to our customers in all our service offerings, as well as
delivering a supporting ecosystem of devices, OTT partnerships
and high value data-led customer offers. Finally, we are focused
on delivering a superior customer experience by engendering a
customer feedback culture into everything we do, to attract and
retain higher value customers.
2. Moderately Expand the Core
We will continue to invest moderately in Digital Applications and
Services within our areas of focus which include Advertising,
eCommerce, Money and Entertainment, as well as pursue
connectivity and platform opportunities in the emerging Internet
of Things (IoT) industry. In the area of enabling infrastructure, we
will continue to invest in and grow our edotco business. We will
pursue convergence in all our markets where it is value accretive
to our business using a fit-for-purpose combination of fixed and
wireless technologies.
3. Selectively Acquire New Core
As we have already demonstrated through our in-market
consolidation initiatives in Sri Lanka, Cambodia and Bangladesh,
our primary strategy is to pursue in-country consolidation
opportunities to strengthen our market positions. We will only
consider opportunistic new footprint within our core region
where it makes strategic sense and is financially sensible. We will
also acquire new digital, Internet and tower companies that fit
our focus areas and investment criteria.
4. Effectively Manage and Enable the Core
We will continue to focus on Return on Invested Capital
(ROIC) and Profits After Tax and Minority Interests (PATAMI)
improvements and initiatives. Talent upskilling to Digital is a
key focus for the Group and our OpCos, as is a strong focus on
Regulatory engagement to achieve positive outcomes on issues
such as spectrum, industry taxation, licensing and regulatory
compliance.
Having achieved our vision of becoming a ‘Regional Champion’, the
strategy we have put forward for Axiata 3.0 will place us in a strong
position to capture opportunities over the coming five years. Our
strategy incorporates high growth and upside opportunities whilst
requiring investments in the near term to realise long term value. As
such, our financial stance and value proposition to our shareholders
remains as ‘Balanced growth and dividend proposition’ in the near to
mid-term.
axiata group berhad | annual report 2015
021
