Creating an Asia-wide superhighway

05 July 2021 | Melanie Mingas

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Appointed to head Axiata Group Berhad’s newly formalised wholesale division, Obaid Ur Rahman is setting the scene to create an Asia-wide superhighway – not to mention becoming the region’s preferred wholesale partner. Melanie Mingas reports.

Taking the helm as Axiata Group Berhad’s head of wholesale in September, Obaid Ur Rahman joined the Malaysian telco on a mission to drive synergies across existing opcos and infrastructure, while positioning the group as a key wholesale player across Asia.

Responsible for the consolidation and optimisation of the wholesale division across Axiata’s six markets – Malaysia, Indonesia, Nepal, Sri Lanka, Bangladesh and Cambodia – Rahman brings more than 24 years of experience to the group.

Moving regions during a pandemic adds a certain twist, but two quarters into his new role at the time of interview and Rahman reports that, “from a professional standpoint it was a perfect time.”

“Across the whole region, Axiata itself and other telecoms companies were transitioning. What that meant was one could come in and start from scratch. The planets were aligning for someone to come in, build the capability and initiate a new wave of change,” he recalls.

As that somebody, Rahman used his first quarter to assimilate existing assets and capabilities, meeting peers and opco colleagues and finding gaps that could be plugged – all while “trying to understand how things have changed” across the Asia market.

“Since the demographics were changing, the balance of trade was changing too, hence I needed to understand what are the fundamentals that need to be addressed. I’ve looked after the Asia market in previous roles but coming into it in a mid-Covid era was a different ball game,” he adds.

Pandemics aside, the key difference this time is that Axiata’s operating markets are in an undeniable – and unprecedented – growth phase.

“If you look at all the macro indicators, all the growth is originating from Asia, be it from digitalisation of economies or financial inclusion; and the growth isn’t just in intra-regional traffic, but for intra-Asia traffic, too. The latter part is our internal strength as we serve 155 million eyeballs of our own in six key Asian geographies,” he says.

Those macro indicators include an e-commerce industry with plenty of potential to fulfil, “fairly low” smartphone penetration with plenty more to give, and a growing middle class with family members who will soon be into gaming – if it all goes to plan.

In response, Rahman set out a 100-day plan, “wrapped around stakeholder share, organisation, quick wins and external party positioning,” he explains.

“The reason we have set up this wholesale division is to basically bring in a change, serve our customers with better delivery channels and get closer to hyperscalers.”

Such an approach also gave Rahman the chance to test capabilities and focus areas – a task he completed while assessing if it was the infrastructure side of the business or industry relationships that worked best.

On the feedback he received, Rahman says: “To summarise, there was a lot of good feedback and we were able to start moving the needle.”

In the context of the financial year, it was also Q4, which meant that while these litmus tests were ongoing the wholesale division was setting financial targets for its first year of operations. While tight-lipped on the figures, Rahman says year one will be all about “laying the foundations”.

“Axiata wholesale is not just a culmination of our six opcos and a corporate stamp on top. It is rather a DNA we are embedding in all our opcos,” he explains. The aim is for it to become the preferred Asia partner across all products and services.

“When it comes to roaming, we want to offer them different technology – the evolution from 3G to 4G and 5G – when it comes to voice we want to partner with OTTs, when it comes to data and capacity we want to be the focal point for our geographies, and when it comes to giving that last mile capability, serving the enterprise customers or enabling edge networks, we should be the preferred partner of choice for connectivity,” he continues.

Whether it’s A2P messages or enabling IoT, the ambition is unchanged and, with the scene set, Rahman turned the attention of his 39-strong team to the next task.

Bytes per capita

While wholesale has its own nuances and evolutionary quirks to contend with, further downstream it is content making waves – user-generated content, specifically, or UGC.

“If everyone is creating an equal amount of content per capita, then we have the largest population, and the highest amount of content will be created out of Asia,” Rahman says.

“Just by simple maths, most of the activity will be carried over here going forward.”

While the North American hyperscalers cannot be ignored, Rahman is of the belief that one also has to keep an eye on the content creators in India and China, and the data tsunami they have the power to unleash on networks. Combine these scenarios with growing internet penetration, the arrival of digitalisation and the resulting boom in traffic and “we need to have the right infrastructure in place,” Rahman says.

For Axiata’s wholesale division, this will be the still point of the turning world for at least the next two years.
“I’m not talking about connectivity point-to-point or increasing the bandwidth into a country. It’s about getting the right economic model as well, in the sense that we have to deliver the content and data at the right price that is affordable in that market and by that consumer.”

At cost base, the target price has been set at 10 cents per gigabyte by 2024 as part of the Axiata 5.0 vision. Achieving that will call on automation, consolidation and harmonisation of existing capacity and there are also new revenue lines in the back pocket that can be leveraged to subsidise, and ultimately reduce, costs.

However, strategic investment is the keystone of the execution, and from the Bay of Bengal Gateway cable to the Echo cable, over the last two quarters the opcos have been on a roll. Rahman says such investments and projects will be executed by the opco then unified at the wholesale level to create a group synergy.

“Most of the cable investments have already been done by our operating companies and now, at the wholesale level, we are harmonising these investments by creating a mesh network which shall not only serve local but regional needs too.

That’s an economical model and a clear group synergy that we are keen to exploit,” Rahman explains.

“These synergies are well established: combined bargaining muscle, coordinated capacity, shared architecture, overarching commercial capabilities, which all should be attractive to our partners.”

A key time

The motive for this strategy is not simply about the route to 2024; it is about establishing a footprint across a diverse and densely populated region at a key point in its history.

“The geopolitical environment is changing within the region. Certain countries see it as a threat, but from a wholesale perspective, it’s an opportunity,” Rahman says. “The epicentres, where most of the hyperscalers were gravitating earlier, they are being disrupted, they possibly fall in the line of friction.”

Rahman moved to Kuala Lumpur from Doha, where he held the position of group head for wholesale and international at Ooredoo Group. In total, Rahman spent 10 years in the Gulf state, but for three of those Qatar was under a blockade from Saudi Arabia, the UAE, Bahrain and Egypt. Flights were grounded, land borders closed and ambassadors recalled.

“We had to just change everything overnight, despite the fact we had done years of planning in terms of how the whole connectivity landscape was supposed to look,” Rahman recalls, and the experience is one he has learned from.

Referencing the “heat map east of the region” in Asia, Rahman explains how, across the continent today, “certain cables go certain ways”, but things may not always be that way.

“I see that whole map is going to change for Asia going forward, there will be twists and turns around it,” he says. “Because of this geopolitical environment you will see new players coming in; new intermediary parties who would bring two parties together, who have to work together but for certain reasons they can’t. That’s something that is going to be interesting to see in this region.

“That’s why we are keen to have a fair share of the pie, because we are already embedded in the whole region.”
Then there’s satellite. Far from politics-free, but certainly seeing stratospheric growth, the question for Rahman is how much of the IoT margin satellite operators will look to take.

“Obviously, they are going to take something out of the growth part of IoT and 5G, but how much? How much is going to be optimised? How much less will we have to build out moving forward?

“Those are all unanswered questions, but one thing is clear – if you look at the number of cables coming up and how they are so quickly overutilised, it is almost mind-boggling. Pre-Covid, any business plan was for 15 years, now my counterparts are looking at seven- or eight-year business plans.”