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

Collaborative with consumers, employees, and business partners

Excellence in how we share innovation and efficiency with every

operating company and every customer

Adaptive to new situations and diverse cultures

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

nationwide

b) Affordable prepaid and

Post-paid Plan

c) Financial Position

d) Marketing and

adverstiment

e) Retail department

WEAKNESSES

a) High operating

Expenses

b) High Churn Rate

OPPURTUNITY

a) Expend customer base

b) Market Growth

c) Upstream/ downstream

integration

d) Provide more value

added service

SO Strategies

Increase supply to east

Malaysia

Move into untappped areas

Increase Number of retail

outlet

Expend network coverage

Provide affortable products

WO Strategies

Increase effecincy in

business and supply

chain of the company

THREATS

a) Strong competitor in

industry

b) Product Substitution

c) Induction to new players

ST Strategies

Penerate in Social

Networking Application

Intrdocue New Hybird

Product

Play on the basic of quality

services instead of price

WT Strategies

Benchmark with strong

competitor

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

3 rd largest

telecommunication provider in

Indonesia Mobile Centric

Operator

WEAKNESSES

Low product quality

OPPURTUNITY

- Market penetration in

internet users are

increasing

- Changing of people

lifestyle and habits.

SO Strategies

-Global expansion to South

East Asia

-Create new appliation which

gives value added to the

customers

WO Strategies

-Divest into new product

market

THREATS

- Market compettition :

Price war, Heavy

Promotion and

Advertisement by rival.

ST Strategies

-Keep low price but still

maintan the services

WT Strategies

-Stragetic alliance with 3rd

party.