Q&A with Andrew Kwok of HGC
18 September 2018 | James Pearce
Capacity speaks to Andrew Kwok about HGC's positioning in Myanmar, its plans for growth in the area and updates on recent annoucements.
Tell us more about the GTMH deal. What is the thinking behind it?
A conditional share purchase agreement was signed on 3 August that HGC Group will effectively become the majority shareholder of GTMH on closing of the transaction. HGC acts as a pioneer in capturing under-developed telecom business in selective South East Asia, helping to pave a gateway for local and international business to meet the recent trend of globalisation and digitalisation.
For Myanmar, since 2008, HGC cooperated with local Myanmar carriers to serve international telecommunications demand both voice and data. The business keeps continue until now. HGC is keen on further extending its success in the Hong Kong local market into Myanmar.
We see an opportunities to help local players to expand its expansion horizontal and vertical. Early this year, HGC and GTMH launch carrier-grade cloud service in Myanmar, enables local carriers to adopt and roll out a global cloud platform that is suited to the local environment.
Investing in GTMH is a part of our long-term strategy where we wish to localise our services and platform into Myanmar and other market. We aim to cooperate with various local players in the form of co-management, co-services, technology transfer, establishing infrastructure and put services on top so as to support sustainable growth in Myanmar
What does a majority stake in GTMH bring to HGC?
We do aim to provide large scale investments to support Myanmar economy. The majority stake is a vehicle, to provide funding support to various projects in Myanmar, with the know-how and relationship with our local partners. Thank you to the supportive policy of Myanmar government where we can localize our resource to support the economy.
Marks the first overseas local expansion of HGC’s business post-acquisition by I Squared Capital and enables the seamless extension of its coverage in Myanmar.
Strengthens our market position in Greater Mekong Subregion (GMS) while at the same time showcasing a successful example of HGC’s developing market strategy.
The sustained efforts and investments in the region targets to become one of the important international operators in the Greater Mekong Sub-Region. With deep expertise and experience, HGC can deliver a full suite of comprehensive end-to-end solutions to local and overseas corporations and operators in Myanmar.
What interests you about the market in Myanmar?
Myanmar is one of the fastest growing telecommunications markets in Association of Southeast Asian Nations (ASEAN).
The Gross Domestic Product (GDP) in Myanmar was worth 69.32 billion US dollars in 2017. The GDP value of Myanmar represents 0.11 percent of the world economy. GDP in Myanmar averaged 33.05 USD Billion from 1998 until 2017, reaching an all-time high of 69.32 USD Billion in 2017.
The Gross Domestic Product (GDP) in Myanmar expanded 5.90 percent in 2017 from the previous year. GDP Annual Growth Rate in Myanmar averaged 8.73 percent from 1994 until 2017.
Both Consul-General of the Republic of the Union of Myanmar and HKMMCCI welcome HGC’s investment in becoming one of the first Hong Kong based telecommunication companies to tap into and invest in the Myanmar market.
Support from HKSAR government in promoting co-operation with ASEAN, demonstrated by the visit of Chief Executive Carrie Lam to Myanmar last September.
Though Myanmar market liberalization just happen for few years, the structure is very well defined and allow player at each level to focus on its core business. Players who got strength in each area can find its own space to grow the business, developing service and platform in a professional manner, with very efficient execution. This match to our philosophy where we focus to do on what we keen to. This kind of environment allows players who focus on specific services and efficient organization can be services in the market.
HGC was the first foreign player to enter the market as part of an agreement with Myanmar Posts and Telecommunications (MPT, state-owned enterprise). How has the market changed since then?
HGC was one of the first overseas telecom operators who serve Myanmar before the liberalization. The telecom services in Myanmar at that time were served by MPT. We do have a close cooperation with MPT, support each other quite well.
The investment in GTMH will help Myanmar become a significant platform for international carriers and corporate customers to take advantage of opportunities to expand into the addressable market of neighbouring countries.
Since the liberalization of Myanmar telecom market in 2014, funding and technology are coming into the market, seems Myanmar market embrace the technology and the consumers adapt to the new service quite well. Surprisingly, it’s a leapfrog jumping that make Myanmar market is one of the fast growing sectors in Asia. A breakthrough to the telecommunications industry in Myanmar and also a huge boost for the economic development for the country as well as ASEAN in long term.
For HGC we also plan to deploy both basic infrastructure and high tech premium VAS at the same time. We do believe, the Myanmar market will embrace a new technology, and the market does not have costs of switching the service which is a beauty, as the new service deployment without switching costs will give a very efficient price-performance ratio.
Tell us about the partnership with Blueface? Is the demand for UC services growing?
Collaboration with Blueface to launch UC Anywhere, an integrated, feature-rich and flexible cloud-based unified communications (UC) solutions which suit corporations of all sizes.
Corporations are opting for digital transformation to make their business processes more efficient in support of growth. A cost-effective and ever-evolving communication tool connecting internal and external parties has therefore become essential to day-to-day operations. Without the need to make any hefty CAPEX investment.
This is one of our major milestones. Since establishment of the new HGC, various operators and service providers are coming in for co-operation in various fronts and we are reaching out also. We will be announcing more co-operations in coming months as to achieve our organic and inorganic growth. We believe, in some appropriate area, “Together we may earn a little bit less, but earn faster and bigger.”
• Choose the way you want to communicate – UC Anywhere delivers communications in multiple forms to suit a customer’s diverse and changing needs.
• Local access, global reach –UC Anywhere is carried by a global ring UC network running on highly-secure and reliable networks. Businesses can enjoy a smooth delivery of uninterrupted voice and video transmission on an international scale, with exceptional service quality anytime, anywhere.
• Multi-country phone numbers in ONE device – UC Anywhere is able to consolidate a variety of overseas numbers. As a result, businesses can be reached via local numbers in designated overseas countries.
• Call flow management at your fingertips – HGC has taken a traditionally-complicated IVRS call-flow to a refreshing new level of simplicity. Our Advanced Call Flow (ACF) Management Module is a sophisticated yet easy-to-use built-in call-flow management function that enables customers to build and customise their own IVR system call-flow in simple drag-and-drop steps.
• Video and audio conferencing – Video and audio conferencing features allow you to communicate in a fully-rounded manner, while sharing screens with colleagues and business partners dispersed around the world.
What countries does the partnership cover? Will this be expanded, and how?
The business coverage is worldwide due to HGC’s extensive connectivity.
• HGC provides international connectivity, holds a wealth of experience in designing and tailoring the services for Asian market and act as first tier support for enterprises.
• Correspondingly, Blueface provides full suite of cloud-based communication application untilising their international backbone infrastructure covers in North America and European countries.
• Riding on both companies’ international backbone infrastructure, which covers Hong Kong, Asia, Europe and North America, a full suite cloud-based unified communication service in plug and play manner is ready to serve the market.
What other developments can we expect to see from HGC in the region?
• HGC can further deliver advanced, complex and customized solutions, and ensure high level of guaranteed end user experience.
• Our solution portfolio is enriched. HGC continue to provide full-fledged telecom, data centre services, ICT solutions and broadband services for local, overseas, corporate and mass markets.
With HGC’s strong global presence, continuous expansion in challenging Asia markets, and close relationship with carriers and partners worldwide, the mutually-beneficial collaboration with the leading Unified Communications technology provider Blueface will encourage and stimulate the exchange of expertise and knowledge which will facilitate the implementation and extension of the integrated communication tools across carriers and enterprises.
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