Regional aspirations

11 Apr 2007

Telekom Malaysia (TM) chairman Muhammad Radzi Mansor and TM International CEO Yusof Annuar Yaacob share the group's investment strategy for moving beyond its shores with group editor Joseph Waring and outline the lessons learned along the way in markets like India, Indonesia and Africa

Telecom Asia: What was your main thrust behind the move to expand regionally‾

Chairman Mansor: Apart from seeking growth, we feel we can share our experience in developing communications services within the developing world. We started more than 12 years ago looking at new opportunities. When we were still government-owned, the government encouraged us to venture overseas. That's when we obtained GSM licenses in Sri Lanka and India after those markets were opened up. Since then we've expanded as far as Africa where the growth opportunities are huge.

Our international business now accounts for some 25% of the group's total revenue and about 25% of its profits.

Yaacob: Another factor was that the government had asked TM to depose of its cellular arm in Malaysia. We wanted to get into mobile, so if we couldn't do it in Malaysia, overseas was the place to do it.

What were the objectives in your aggressive advertising campaigns in business publications‾

Yaacob: One of the key reasons for the aggressive push in the Wall Street Journal Asia and all the rest is that first, we changed the logo and we changed the name. Second, it was important for investors to see us as a regional company. Most people, previously, thought of TM as a Malaysian company with a clutch of assets in Asia. They didn't understand that if you look at our earnings profile, most of the revenues and profits going forward will come from Indonesia, Sri Lanka, Bangladesh, India and so forth. For us it was basically trying to tell the world that TM is now a different company than it was two years ago. In 2004, we had six assets - three in Asia and three in Africa. In the last two years, everything has moved to Asia, which has been a real transformation not just in the quality of our overall earnings but also in how it is split out.
Mansor: From a business point of view, we needed to inform the rest of the world that we intended to be a true regional player in the market and actively venturing into other markets. So we set about highlighting our experience and our synergetic advantages within the group. Three years ago we rebranded and continue to need to reinforce the new branding.

How do you track and respond to the myriad of opportunities in developing markets‾

Mansor: Instead of having just one unit within the group focused internationally, we formed the investing arm Telecom Malaysia International to make investments in overseas markets. We continue to look for strategic investments in countries with strong potential for growth and where there is strong economic and political stability.

You must be able to understand the market and what the regulatory environment is like. You have to adopt an entry strategy, but you must also have some form of an exit strategy as well.

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