History of Axiata Malaysia

Q1. Penetrating into the mobile broadband, upgrading to 4G network and increasing data segment are now focus of Axiata. Analyse and discuss the strategic directions of Axiata in the local and international markets and segments within these markets. With reference to the analytical models what are your opinions on Axiata’s strategic plans

History of Axiata Axiata Group Berhad (Axiata) is an Asian company that invests in the Telecommunication sector and has controlling stake in telecom companies in Malaysia,Indonesia, Sri Lanka, Bangladesh and Cambodia and significant strategic stakes in India, Pakistan, Iran, Thailand and Singapore. Axiata Group Berhad (Axiata), previously TM International Berhad, is one of the leading telecommunication companies in Asia. The company focuses on servicing high growth low penetration markets which are emerging. The company is engaged in provision of wide range of telecommunication and consultancy services through its subsidiaries across 10 countries in Asia. In their media release in 2012, it was announced that Axiata had over 200 million subscriber across Asia and a Group revenue of RM16.4 billion in 2011. It was also reported that the company provided employment to 20,000 people in 10 countries. The Group's mobile subsidiaries and associates operate under the following brands - Celcom in Malaysia, XL in Indonesia, Dialog in Sri Lanka, Robi in Bangladesh, Smart in Cambodia, Idea in India and M1 in Singapore. Axiata was awarded the Frost & Sullivan 2009, 2010, 2011 and 2012 Asia Pacific ICT Award for Best Telecom Group and the Telecom Asia Best Regional Mobile Group 2010 and 2011 for its operations in multiple Asian markets.

Aixata Brand Value 

Principled in how we conduct our business

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Collaborative with consumers, employees, and business partners

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Excellence in how we share innovation and efficiency with every operating company and every customer

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Adaptive to new situations and diverse cultures

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Innovative in how we improve our work and adopt new technolog

Group Management Team

Group Corporate Structure

What is mobile broadband 4G? Mobile broadband is the marketing term for wireless Internet access through a portable modem, mobile phone, USB wireless modem, tablet or other mobile devices. (http://en.wikipedia.org/wiki/Mobile_broadband, n.d.) 4G is a wireless network that will substitute the current 3G networks. The 4G technology is designed for deliver faster speeds and it is supposed to be four to ten times faster than the 3G technology. 4G technology would enables IP-based voice, data and streaming multimedia at higher speeds and offer at least 100 Mbit/s with high mobility and up to 1GBit/s with low mobility. 4G can be best described in one word “MAGIC”, which stands for Mobile multimedia Anytime Anywhere Global mobility support, integrated wireless, and personalized services.

Mobile subscribers forecast

(slideshare.net, n.d.)

Generations of Mobile Broadband (http://en.wikipedia.org/wiki/Mobile_broadband, n.d.)

Celcom Celcom Axiata Berhad, is the oldest mobile telecommunications company in Malaysia. Celcom is one of a member of the Axiata group of companies. Being one of the very few companies in Malaysia to originally obtain a cellular phone license, it successfully introduced mobile telephony in Malaysia through its ART-900 (Automatic Radio Telephone) service, using first generation (analogue) ETACS (Extended Total Access Communication System) specifications of the United Kingdom, a derivative of the US-AMPS (Advanced Mobile Phone System) technology. Celcom is the country's premier and most experienced mobile telecommunications company with close to 12 million customers. It is also the leading mobile broadband service provider in Malaysia with over 937,000 subscribers. Celcom provides prepaid and postpaid mobile services and leads the industry with mobile broadband services in Malaysia. The widest network coverage in the country, its 2G and 3G networks covers 95.0% and 81.7% of the population respectively, it continues to invest in network coverage, capacity and performance, and intends to maintain its technology leadership and position as the country's best mobile service provider.

3 key strategic Environments The below figure shows, strategic planning with an analysis to understand Axiata 3 key strategic environments namely a) External Environment b) Industry Environment c) Internal Environment

a) External Environment External Environment is defined as Conditions, entities, events, and factors surrounding organization that influence its activities and choices, and determine its opportunities and risks. PESTEL analysis This section will analyzed the political, economic, social, technological, legal and environmental structure that affects telecommunication industry. Axiata Political a) Prolonged Internal Political Stability b) Strong Government Support c) Discourage the usage of cell phone in school Economy a) Globalization b)High Inflation c) Globalization

Environment

Green technology has always been given by celcom in prevention on hazardise adiat in the Telecommunication technology Social

High Literay rate Malaysia‟s Literacy Rate for 2013 was at 93.1% – defining that majority young Malaysia 15 years old can read and write. This is good news to telecommunication industry as literacy leads to knowledge hunger. With the rapidly improving of telecommunication and internet connectivity, Malaysian spend more time and money for internet online 24/7 and keep in touchmore often through conveniently cheap telephone calls and texting. Higher Standard of Living among Malaysians

Industry Analysis perspective The buyers in mobile phone market grew by 23, 5500 and the market trend in increasing. In the 3G usage are also increasing 25% in year 2011. This is impact of the increasing usage of Blackberry, Iphone, ipad, Samsung and others smartphones or tablets. It is a competitive environment where 3 major players are competing each other capturing majority of the market share where Maxis capturing 42%, followed by Celcom 31% and thirdly is Digi with 27 % in market.

PORTER 5 FORCE Threat to new entrance a) High amount of capital b) Government c) Regulation d) Brand Loyalty e) Product Offered Determine OF Supplier Power a) High Number of supplier b) Lock in supplier strategy Threat to substitute goods a) Switching Liability b) Low price and rate Determine of Buyer Power a) Lower operating Cost b) Smart Spending Rivalry among Existing Firms a) Strong Alliance b) Government protection

SWOT analysis Strength a) The widest and most extensive coverage nationwide b) Affordable prepaid and Post-paid Plan C) Financial Position d) Marketing and adverstiment e) Retail department Weakness a) High operating Expenses b) High Churn Rate Opportunity a) Expend customer base b) Market Growth c) Upstream/ downstream integration d) Provide more value added service Threats a) Strong competitor in industry b) Product Substitution c) Induction to new players

TOWS Matrix STRENGHT a) The widest and most extensive coverage

WEAKNESSES a) High operating Expenses

nationwide b) Affordable prepaid and

b) High Churn Rate

Post-paid Plan c) Financial Position d) Marketing and adverstiment e) Retail department OPPURTUNITY a) Expend customer base b) Market Growth

SO Strategies

WO Strategies

Increase supply to east

Increase effecincy in

Malaysia

business and supply

Move into untappped areas

chain of the company

Increase Number of retail c) Upstream/ downstream integration d) Provide more value

outlet Expend network coverage Provide affortable products

added service

THREATS a) Strong competitor in industry

ST Strategies Penerate in Social

Benchmark with strong

Networking Application

competitor

Intrdocue New Hybird b) Product Substitution

Product Play on the basic of quality

c) Induction to new players

WT Strategies

services instead of price

Conclusion for Malaysia Strategy Celcom practice is concentric diversification where its involves adding news services to the old business. Where Ceclom is planning to add three prepaid package in 2014. Celcom has also introduce Talk and Surf is a first plan with additional data. This new products latest promotion which will gives cheaper data plan together with the Celcom Frist voice plan.

XL Xiata Indonesia As one of Indonesia's leading telecommunications service providers, XL offers an array of innovative telecommunications products and services ranging from voice, SMS, VAS to mobile data covering more than 90% of the population throughout Indonesia. With over 15 years experience

XL, armed with a deep understanding of its subscribers needs, is credited with bringing cellular services to ordinary Indonesians when it introduced the budget 'IDR1/second' programmed in 2007, allowing more middle and lower income groups access to cellular services. XL has grown from a small company offering basic telephony services into one of the country's largest telecommunications companies, with extensive network infrastructure and services. XL Axiata Vision To become one celluar operator in Indonesia, which manifested in a commitment to satisfy its customers ,shareholder, and employers needs

XL Axiata Values a) Integrity b) Teamwork c) Service Excellence

Pl XL Axiata Tbk is one of Indonesia’s leading cellular service provider, offering various types of communications products and services such as a) Voice b) SMS c) Other added value-added products and services

PORTER 5 FORCE Supplier Bargaining Power. Ranging from the packaging, card production, BTC rental, Headphones, IT provides, music label.

Potential New Entrance Alcatel – Lucent is targetting Asia. Have strong relationship with Indosat and Telkom to expand their business in Indonesia

Buyers Bargaining Power Most people are price sensitive but also wants a good services and networks The substitute of mobile phone is fixed line and also internet connection through laptops using local area network ( LAN ) cable

STRENGHT

WEAKNESSES

3 rd largest

Low product quality

telecommunication provider in Indonesia Mobile Centric Operator OPPURTUNITY - Market penetration in internet users are increasing - Changing of people lifestyle and habits.

THREATS

SO Strategies - Global expansion to South East Asia

market

gives value added to the customers

ST Strategies - Keep low price but still

Price war, Heavy

maintan the services

Advertisement by rival.

- Divest into new product

- Create new appliation which

- Market compettition :

Promotion and

WO Strategies

WT Strategies - Stragetic alliance with 3rd party.