Telekom Malaysia starting to grow regionally
Have you realised something recently? Telekom Malaysia, after years of somewhat slower expansion and even retreat, starts to refocus their business.
There was a time when they were pretty active in Africa, especially in Ghana and than, in South Africa, but those stakes were sold of this year.
But now look what they have done over the last couple of weeks - or better, only this week:
- Acquisition of a majority stake in Excelkomindo, Indonesia's third largest cellular operator
- Than, Telekom and the Singapore government's Singapore Technologies Telemedia , agreed to buy 47.7% of Idea Cellular Ltd., India's fifth-largest mobile phone operator
- This compliments their presence in Sri Lanka, Bangladesh and Cambodia and India. In Bangladesh, Telekom reaffirmed its commitment to its Bangladesh unit TMIB, the firm behind domestic brand Aktel
While it will take time to realise any profit from their overseas expansion, it is clear that this is a useful, and probably successful strategy. Currently, overseas operations contributed 29% of Telekom Malaysia's 2003 earnings, though this is projected to fall to 21-22% in 2004, according to its CEO. It is also a necessary strategy, in order to start competing against Singapore Telecommunications that became stronger and stronger over the last couple of weeks and months as well. Overseas markets such as Indonesia and Bangladesh have extremely low mobile penetration rates - 8% and 2% respectively, which allow for longterm future growth opportunities for the company. India is another excellent example for possible growth with a low penetration and a huge population base.
Telekom is also struggling at home. While the market in mobile communications Malaysia is quickly closing in to saturation, it lost its leadership in the market to Maxis again, as the integration of Celcom dragged in longer than expected.
Well, let's see how it develops - the company has to show that it can execute. Under their new leadership, I am pretty optimistic.
(By Asia Business Consulting)
There was a time when they were pretty active in Africa, especially in Ghana and than, in South Africa, but those stakes were sold of this year.
But now look what they have done over the last couple of weeks - or better, only this week:
- Acquisition of a majority stake in Excelkomindo, Indonesia's third largest cellular operator
- Than, Telekom and the Singapore government's Singapore Technologies Telemedia , agreed to buy 47.7% of Idea Cellular Ltd., India's fifth-largest mobile phone operator
- This compliments their presence in Sri Lanka, Bangladesh and Cambodia and India. In Bangladesh, Telekom reaffirmed its commitment to its Bangladesh unit TMIB, the firm behind domestic brand Aktel
While it will take time to realise any profit from their overseas expansion, it is clear that this is a useful, and probably successful strategy. Currently, overseas operations contributed 29% of Telekom Malaysia's 2003 earnings, though this is projected to fall to 21-22% in 2004, according to its CEO. It is also a necessary strategy, in order to start competing against Singapore Telecommunications that became stronger and stronger over the last couple of weeks and months as well. Overseas markets such as Indonesia and Bangladesh have extremely low mobile penetration rates - 8% and 2% respectively, which allow for longterm future growth opportunities for the company. India is another excellent example for possible growth with a low penetration and a huge population base.
Telekom is also struggling at home. While the market in mobile communications Malaysia is quickly closing in to saturation, it lost its leadership in the market to Maxis again, as the integration of Celcom dragged in longer than expected.
Well, let's see how it develops - the company has to show that it can execute. Under their new leadership, I am pretty optimistic.
(By Asia Business Consulting)
posted by Andreas @ 5:00 pm
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