Axiata Group Berhad - Annual Report 2016

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Axiata Group Berhad | Annual Report 2016 OPERATING COMPANIES BUSINESS REVIEW 050
AXIATA
DIGITAL
Axiata Digital’s mission remains to enhance
Axiata’s core business revenue by creating new
sources of value and contributing to the long-
term upside creation through partnerships and
acquisitions in the digital ecosystem.
Through Axiata Digital, we have expanded our
portfolio of services to cater to online customers
via connected devices and our digital strategy
has managed to capture an increased share
of customer wallet and reach beyond Axiata’s
traditional mobile services of approximately 320
million mobile subscribers.
Axiata Digital is in a unique position to leverage
on the Group’s strength as a leading regional
telecommunications operator, by building on
existing customer relationships within our eight
mobile markets, which now includes Nepal
through the acquisition of Ncell in 2016. It is also
able to capitalise on the physical distribution
networks of Axiata and partner stores in most
of our markets of operation, allowing customers
and digital businesses alike to have physical
points of contact.
As the Group enters into its third phase
of growth which focuses on being a New
Generation Digital Champion, Axiata Digital
supports Axiata’s growth agenda through the
following value capturing initiatives:
• Driving synergies across the portfolio of
investee companies and related Operating
Companies (OpCos) through the use of
relevant services and joint marketing
activities
• Creating value by churn reduction,
increased data usage and insights into user
behavior that can be leveraged by mobile
operations
• Attracting new strategic and financial
investors to contribute to the growth of the
investee companies
The learnings, experience and data acquired
from incubating and launching new businesses
have assisted Axiata Digital in developing new
business models to address prevailing market
challenges of hypercompetition, disruptive
technologies and new trends. As at end 2016,
Axiata Digital has focused its investments in
seven key business verticals namely Digital
Advertising, Digital Marketplaces, Digital
Financial Services, Digital Entertainment and
Education, Internet of Things (IoT) and Over-
The-Top (OTT) Enablement Platforms. We have
29 digital businesses across these verticals, with
three subsidiaries and seven joint ventures, and
serve 32 million customers.
Enabling and Investing in the Digital
Ecosystem
In 2016, Axiata Digital made progress on its
investments in FreedomPop and Adknowledge
Asia as both concluded private placements from
external investors. The Company also completed
a strategic equity investment through StoreKing,
an assisted e-commerce player based in India, in
July 2016. Regional expansion plans are ongoing
to roll out the StoreKing model in Axiata markets
targeting rural segments. 2016 also marked the
commencement of further fundraising exercises
for Yonder, Adknowledge Asia, , elevenia
and 11street.
Axiata Digital has also further increased its
portfolio of services through the setup of mobile
IoT Cloud, a cloud-based IoT platform to serve
all IoT verticals across the Group's markets.
Other launches include WSO2.Telco’s digital
enablement hub to deliver the GSMA Mobile
Connect mobile-based authentication solution
to the six major telcos in India which include
In 2016, Axiata recorded six key milestones in strengthening, expanding and increasing its digital portfolio covering digital commerce
and activation, digital advertising and digital entertainment.
Private placements closed for
FreedomPop and AdKnowledge
Asia from external investors
Completed acquisition of assisted
e-commerce StoreKing, Axiata Digital’s
first investment in India
Digital entertainment app Yonder
Music expanded into Bangladesh and
Indonesia, and is now in three markets
with more launches in 2017
E-commerce assets continue
leadership position with
leading in Sri Lanka, and elevenia
and 11street strong #2 players in
Indonesia and Malaysia respectively1
Expanded its portfolio with IoT Cloud -
a cloud-based IoT platform launched in
Sri Lanka to serve the Group’s markets;
and StoreKing in India
Launched Indonesian Video-on-Demand
(VOD) service, Tribe, in partnership with
Astro; e-ticketing service bdtickets
in Bangladesh; and WSO2.Telco’s
digital enablement hub to deliver the
GSMA Mobile Connect mobile-based
authentication solution in India
Aircel, Bharti Airtel, Idea, Tata Teleservices Ltd,
Telenor and Vodafone with a potential reach to
over 800 million subscribers.
Digital entertainment app, Yonder Music,
expanded into Indonesia and Bangladesh in May
2016. With Yonder Music currently available in
three markets, it is set to expand further into
Axiata’s remaining markets of operation and
beyond Asia in 2017. XL Axiata launched Tribe,
a Video On Demand service in partnership with
Malaysia’s Astro. bdtickets, Robi’s e-ticketing
platform was officially launched in January 2016
and has established itself well in the Bangladesh
market.
Meanwhile, elevenia and 11street continue to
grow and are both strong number two Online
Marketplace Platform (OMP) players in their
respective markets. continues its lead
in Sri Lanka and has increased its market share
gap with the competition. Adknowledge Asia
is the largest AdTech company in the region
and expanded its presence to India by hiring a
Country Managing Director to oversee market
development.
WSO2.Telco joined several of the world's
largest mobile network operators, infrastructure
providers, system integrators and other
technology companies in support of Facebook’s
Telecom Infra Project (TIP). The initiative brings
these companies together to collaborate on
the development of new technologies and
reimagine traditional approaches to building and
deploying telecom network infrastructure.
Finally, Axiata Digital Innovation Fund (ADIF),
the largest digital services corporate venture
capital fund in Malaysia, continued its year
two batch of IT investments. Three Malaysian-
owned technology companies received funds of
RM11.4 million which will be used to expand their
business and product reach into the regional
digital services marketplace.
1 #2 players in terms of Gross Merchandise Value (GMV)