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The state of telcos in Asia

Zafar Anjum | June 3, 2014
Interview with Suresh Bhatt, Head of Telecoms in South East Asia, Tech Mahindra

He finds Hong Kong similar to Singapore. "It is mostly post-paid market and device affinity is very very high," he says. "Therefore, (adding) additional revenue streams seems to be the biggest challenge."

According to Bhatt, Tech Mahindra is also interested in new markets like Myanmar. They are exploring it and they see some amount of headroom in that market as it is uniquely different from all of these. "Subscription growth is still below single digits," Bhatt says. "Grabbing subscription base is what is race is for now."

Singapore: A posterboy for regional telcos

"Singapore is one of those markets that has kept ahead of the game," says Bhatt. "It is a poster-boy for some of the regional market players. They learn from what the telcos are doing here. But they have large market base to play with that Singapore telcos don't have. So their offerings are also different. For example, in Philippines, Globe tied up with Facebook to give free access to Facebook on mobile phones for three months. After three months, obviously they will start charging a fee. That is their plan to beat the OTT (over the top players) players. I think in the long run these strategies will pay off."

On OTT (over the top) players

Telcos in Asia are yet to come to terms with the challenge thrown by OTT players. How do telcos should deal with them? Should they shut them out or partner with them? "Some telcos are willing to collaborate and some are still in a state of denial," says Bhatt. "They still think that they can have their own offerings. In some markets we see that. They are making their own offerings. That is a game you have to see and watch it evolve. Some realise that they cannot reinvent the wheel so it is better to partner with them (OTT players) then to fight with them."

"Most of the regulators in the region, except for the limited few, really have the strength to drive the market," he says on the role played by telecom regulators. "Probably in Singapore it is very vocal and strong and has a rigid control. Same in Hong Kong but in other countries perhaps they are not so much strong. The lobby seems to be much stronger."

Tech Mahindra's offerings for telcos

In the mature markets, increasingly many of the telcos are seeking Platform As A Service (PAAS). Under this model, the initiative and innovation comes from the Systems Integrator (IT Company such as Tech M) which offers a set of solutions and aggregates third party solutions together as an OPEX-based service. The IT company and the Telco work in tandem to share revenue, and often clubs together a third party - the apps developer/specialist services provider. The IT company and the apps/specialist services provider ride on the subscriber base of the telco, who often does not pay upfront for the adoption of the service.


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