Connect or perish, telcos can’t wait anymore: Apigate CEO
By Edwin Yapp April 4, 2019
- No luxury of time to transform; one year at most
- API platforms are the quickest way to grow revenue, profitability
FOR the past few years, the enterprise world has been beating the digital transformation drum and saying how businesses which don’t transform will be left behind. But for Zoran Vasiljev (pic), that ship has already sailed.
The chief executive officer of Apigate Sdn Bhd says the time to talk about digitisation is over and what enterprises, especially telco-related companies, should be talking about is monetisation.
“Everyone is talking about digitisation and transformation,” he argues. “Companies hire chief digital officers (CDO) but in reality, there is no end point to this as the more stuck an organisation is [on digitisation] the worse it is for them.
“When are they going to start thinking about monetisation?” he candidly asks.
Apigate is a wholly-owned subsidiary of Axiata Digital Services Sdn Bhd, a company initially set up to help manage Axiata’s core telco business. In 2017, the internally-run group was rejigged to become a full-fledged subsidiary aimed at becoming an application programming interface (API) development and management company. The company targets to become profitable by 2021.
APIs are a set of protocols that allow software and applications to communicate with each other in a seamless manner in the background without users knowing. APIs are frequently used in today’s interconnected world, such as when an e-commerce app asks for a password to login. In such cases, users could opt for using their Google or Facebook password to login via an API call to enable authentication instead of having to sign up for a new password with the e-commerce app.
Vasiljev claims that according to a survey done by Apigate, 81% of telco executives say they believe they have up to three years to move to a [API] platform-based business model that will power their core business strategy, something Vasiljev disputes, noting that “this is two years too late.”
“We boldly claim this is too late because data and pricing today have deteriorated to the point that they don’t have three more years to move to a platform strategy,” he argues. “I believe that if they don’t do it within the next one year, these businesses are going to be under severe pressure,” he says, adding that some may even fail.
Vasiljev says the concept of moving from digitisation to monetisation is the reason for Apigate’s existence, and that’s why the company is structured the way it is.
“Being part of a mobile network operator (MNO) group, we’ve learnt from the customer end of the business and now we can demonstrate to our partners how we can help them use our platform to monetise quicker,” he claims
The problem stated
According to Vasiljev, many MNOs around the world need help with digitisation but at the same time find it difficult to connect to a large number of digital services companies that exist in the market.
In today’s world, traditional telco-based companies are embracing API platforms in a bid to become more agile and interconnected. For example, a telco that wants to offer a video over-the-top service could do so by connecting to such a company via APIs, rather than building the video service by itself. Similarly, an MNO wanting to offer gaming services can do the same by connecting with a gaming service provider.
Vasiljev points out that there are many layers that exist for proper integration between MNOs and digital services companies. And it is getting increasingly difficult for the two parties to cut through these layers and for them to integrate with different platforms, he argues.
Another challenge is that MNOs need to partner with multiple API companies, each in different geographies, and they need to make all the pieces fit together, he adds.
As an API platform company, Vasiljev claims Apigate has managed to remove most of the friction that exists in this process and to help C-Suite executives of digital companies and MNOs solve some of the tougher headaches in the business.
“We are building a platform to allow digital trailblazers to reach their destination quickly. And we’re looking to enable the next winners in the digital space.
“We have removed this friction with a single platform in a seamless and secure way. Whether you’re a media or gaming company, an over-the-top or fintech player – all they need to do is to integrate with us only once. As it stands today, we are connected to over 100 mobile operators, reaching 3.1 billion users.”
Asked what makes Apigate different from its competitors, Vasiljev says Apigate was born in Southeast Asia and is very familiar with the market and telco landscape.
Arguing that Asia [and Southeast Asia] is the place to be as other western markets are increasingly saturated, Vasiljev says Apigate’s mission is to move from digitisation to monetisation.
“We are in the right place at the right time, and companies looking to go beyond digitisation can come to us and plug into our system and monetise as quickly as they can,” he claims.
Becoming a ‘unicorn’
Meanwhile, Vasiljev reveals that while Apigate is currently 100% owned by Axiata, the plan calls for it to be a unicorn – valued at over a billion dollars – by 2022.
“We are in the process of securing Series A funding from Silicon Valley and we’re close to achieving this,” Vasiljev says. “We have funding now but raising extra funds from venture capitals in Silicon Valley goes beyond just money – it gives us access, advice, and opportunities from people who have invested in similar companies.”
The plan for Apigate is in line with Axiata’s similar ambition of spinning off other digital entities such as its digital payments arm Boost and its digital advertising firm ADA as unicorns by 2022.
Asked how confident he was in achieving this, Vasiljev says he is cautiously optimistic, given that the current value for Apigate stands at about US$200 million today.
“With every new month and every new large partnership and integration, our gross transaction value (GTV) increases, so it’s only going to go up. We’re on the right path to get there fast – perhaps even before 2022.
“We have received signals from the VC community that this is a much more valuable company than what we think right now, but we’ll know more when the first round of investment comes in.”
Vasiljev says Apigate has increased its revenue by three times, and GTV projections for this year could surpass its 2018 target.
“We’ve been very disciplined so far and our losses are small compared to our appetite,” he argues. “The way we structure our deals and select the brands we work with will allow us to seal deals favourable to our cost structure.”