Thursday 8 June 2023

Low Cost Bit Factory as Foundation for Axiata's Telco to Techco Evolution

Last year, Thomas Hundt, chief strategy and technology officer at Axiata Group, outlined the company’s efforts to reduce operating costs, as it grapples with the challenge of managing rising capex at Huawei eMBB Forum in Bangkok. Axiata is one of the largest operator groups in Asia, with 163 million customers in 11 countries including Malaysia and Indonesia. MWL reported:

Hundt insisted operators can better handle the “capex tsunami” by collaborating and sharing infrastructure and offloading tower assets.

He highlighted Axiata’s aim to become a platform company which requires building new technical capabilities. “We are very much engaged in transforming our IT” to improve efficiency.

As data demand grows exponentially, ARPU has been relatively flat and even declining, with sub-$2 ARPU in some of its markets, he said.

The price of a 1GB of data has fallen significantly every year since 2020, but at the same time the yield is declining. “At the end of the day, the yield and the costs are not giving us a fantastic data margin, which we have to address through structural transformation.”

While Axiata has not launched commercial 5G services in markets in Asia, he said it is preparing for rollouts, adding in the next year it aims “to unlock the power of 5G”.

As you will notice from the image on the top, Axiata has set itself a target of driving the bit production cost down to 10 cents per Gigabyte. This will only be possible is they utilise the collective brain of all OpCo leaders coming together to make Group-wide decisions, OpCo resources taking on Group targets, and OpCo resources involved in end-to-end execution. 

The group is go through a number of activities to be able to achieve this very challenging target of USD 0.10/GB. These include:

  • Value-Based Planning
  • 3G Shutdown
  • Moving to Open RAN and Open Networks
  • Spectrum Optimization
  • Improving VoLTE Maturity
  • Transitioning to NFV/SDN/Distributed Network Architecture
  • Harmonization of procurement across the group
  • Squeeze hardware efficiency through software
  • Lean/Autonomous Operations
  • Network De-risking

You can watch the presentation embedded below:

Axiata is in process of evolving from a traditional CSP towards being both a platform play and a digital CSP (DSP).

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