A holistic approach

  • Business
  • Saturday, 17 Jul 2010

In two years the soft spoken managing director, president and group CEO of Axiata Bhd, Datuk Seri Jamaludin Ibrahim has achieved more than what was expected of him and that has left many to change their perception of him. He met up with StarBizWeek’s P GUNASEGARAM, B.K. SIDHU and LEONG HUNG YEE for some two hours to talk about the changes he effected to reshape Axiata so that it will by 2015 become a regional champion. Here are the excepts of the interview:

SBW: Was there resistance from staff over newcomers into the group?

Jamaludin: Yes, but we had dialogues around the country to explain the strategy.

Did you have to sack people who did not fit into the changed Axiata?

We had to give them opportunities to find other careers, only those who could not adapt to changes. In most cases, it was a mutual separation as they did not agree to what we were doing.

What were the strengths and weaknesses of the team when you took over?

I was pleasantly surprised that Axiata already had a good set of people who worked very hard. We had the wrong notion that people don’t work hard. That was good news. The rest is not bad news but timely need for change in strategy for the whole group. At group level, we have been gathering and building a footprint in 10 countries. After two months in Axiata, I realised the phase of growth is not so much about building a footprint but growing organically. I felt then and now that we had this nice bunch of companies and if we bring the right management team and strategy, it would be better.

Was it difficult to make the changes?

Very tough and difficult when it concerns people. The problem was that some people felt ... there was nothing wrong with TMI? We have to appreciate that TMI was already performing quite well and that made it difficult to change.

Your change was people-centric?

That is one of the most difficult parts. We were quite worried about the name change, the sensitivity surrounding it, but it turned out not so bad. People was the toughest side and that was the main area. As we are developing talent, we needed to identity the best benchmark with the best in the region. If they are not there, then they are not part of the talent field. It involved five levels of management, so all that was difficult.

If you were to compare the talent mangement in Maxis versus Axiata, where does it stand?

That is a tough question. Maxis started building talent from the onset, so it has different benchmarks. Maxis, apart from attracting talent, was able to compensate the talent. But with the de-merger, we managed to change the level of attraction too.

What was your brief from Khazanah Nasional Bhd, the parent of Axiata?

Axiata to be a regional champion and it will give its full support.

You knew there was a de-merger exercise before you joined. What was the incentive to get back into a telco/celco? What motivated you?

I remember very vividly the last thing I wanted to do was to join a telco, do something different instead. I did not have much choice, it was national service. Secondly I was talking to Khazanah about talent management, and I was convinced that we could use Axiata for the development international talent. That really motivated me (to make a comeback).

Would the Axiata name be adopted across the region by your units?

The name reflects the philosophy and group wide culture. But each country has its own independent strategy and strengths and should not be managed as a single brand.

Is Axiata going to surprise with dividend payouts this year?

I don’t know yet and we cannot comment. What I can say is that we will be in a good position to consider given our cash position.

Does Celcom need more spectrum?

For 4G, LTE (long term evolution) we need new spectrum. We do not need for 2G, but for 3G we need to re-farm to a more efficient spectrum. We need the 900Mhertz spectrum that can support more customers per cell. And we also need for 4G. We are in discussion with the regulator and they are (looking) into spectrum re-farming.

Axiata is in several countries in the region, would you consider adding more to your portfolio in the near to medium term?

Would not rule that out, but based on our strategy to focus on organic growth, even if there is we do not want too many. We are not footprint (driven) and not interested in far away lands, and because of that it restricts our opportunities.

Axiata is in two big markets where subscriber numbers are growing by the day, but China is also a very big market, why have you not penetrated the China market?

It is a closed market. They do not offer new licences and the two (China Mobile and China Unicorn) are giants. They have 400 million subscribers.

What is the status of your plans to hive off non core assets in Pakistan, Iran and Thailand?

It is a slow process but we are also not in a rush. We are not desperate.

The challenges ahead for Axiata?

In the short term it will be regulatory issues and competition. These are the top two. In the longer term, say 3 to 5 years, it would be still those, but internally, we need to accelerate to meet the complexity of business and it is hard for people outside of the industry to help me. Then there are the non-traditional competitors such as the over-the-top provider which are the Skypes and Googles that will compete with us.

And how will you address this?

By reducing cost so that we are a low cost producer. We rather work with players like DiGi.Com to reduce cost in areas such as transmission. On the customer side, it is about the contact with the customer. We have to perfect the art of managing customers so that we are able to offer not just the normal services but serve the customer better. If we have that touch points and know their usage patterns we are then able to offer products and services that they need such as travel, location based services and other services, and this is yet another area of business, which we see as the next wave.

What are the future sources of growth?

Geographically, it has to be outside Malaysia. From the product perspective, it has to be data and mobile broadband. Data includes generic mobile data; content such as music and games.

What are the industry trends?

Mobile data and mobile broadband will grow quite rapidly. The battle for smart phone will intensify and people will spend more on data than call charges with the growing interest in social networking.

Over the next 3 to 5 years as the smart phone evolves, video-based applications will make a comeback. Androids phones will be big business.

Why has Celcom not brought in the iPhone?

We like the iPhone but we believe in getting an agreement that is fair to us. We do not think the current arrangement is fair to us. But things can change, it can be today, tomorrow or next year when we can roll out.

Will bundling services work for Celcom?

Bundling has not worked very well as people are not for bundled services. They rather pick what they want. But it could be in the future. The parallel concept is convergence. It was not a word that people liked several years ago but it’s now back as the technology is there. We could see mobile broadband, mobile voice, UniFi and fixed line, but it depends on what the consumer wants.

When you talk about regional champion, is that comparable to SingTel?

First, from the footprint perspective, we are focused on South Asia and Asean. Our real comparison should be with SingTel and Telenor. As far as SingTel is concerned and apart from Opus in Australia, they do not have management control, but we have that in most markets. The real comparison should be with Telenor. They are in almost the same markets as we are.

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