Infrastructure play can provide traditional services or move up value chain
Indonesia regulations provide immediate challenge on owning telco towers
IN a turn of events, Axiata Bhd has appointed Suresh Sidhu (pic above), the current chief corporate and operations officer of Celcom Axiata Bhd, as the chief executive officer of its infrastructure company e.co, which has telco assets in Sri Lanka, Bangladesh, India, Malaysia and Indonesia.
Previously slated to run the group’s digital services, Suresh’s move has been necessitated by the sudden resignation of James Maclaurin, who took over at CEO of e.co in January 2014, but who is leaving because of personal reasons.
Suresh officially takes over as e.co chief executive officer on Aug 4 with Maclaurin leaving at the end of August to facilitate Suresh's transition.
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An independent company with its own profit and loss (P&L), e.co will not only be servicing companies within the Axiata Group, but is geared to offering third parties, in the form of other mobile network operators, its services as well. It will also be upgrading its towers to prepare for LTE (Long-Term Evolution) services.
“It is an exciting opportunity for Suresh,” notes as industry player. There is also the likelihood that e.co could head for an eventual listing. Currently, the company’s assets are said to be valued at close to US$2 billion.
In making the initial announcement of the setting up of e.co last October, Axiata revealed that the new business unit will own and manage the passive network infrastructure of the Axiata Group as a business and will have subsidiaries in most of Axiata’s markets.
According to Axiata president and group chief executive officer Jamaludin Ibrahim, “e.co will unlock the value of our assets by driving new levels of operational efficiency in passive infrastructure management and diversifying our revenue streams.”
Industry observers expect e.co to play a key role in the transformation of Axiata into becoming a ‘new generation telco.’
It could play the traditional role of providing passive sharing of infrastructure or it can provide managed services to operators by helping them optimise their networks, reduce costs, provide security services, consolidate BTSes (Base Transmission Stations) and reduce power consumption by using renewable energy sources.
As e.co was only set up in January, Suresh will be busy amalgamating and consolidating the company’s resources, especially in Indonesia where Axiata bought PT Axis Telekom Indonesia last October to add to its subsidiary PT XL Axiata.
Indonesia will also present an immediate challenge as the country’s regulations do not allow for a foreign entity which is privately held to control any local telco assets.
As a result, Axiata is expected to list its Indonesia arm of e.co. “They will likely take over an existing listed company and inject their assets in, and when its shares are listed, foreign entities are then free to accumulate shares in them,” a telco veteran tells Digital News Asia (DNA).
For Suresh, while the infrastructure business may not sound as sexy as the digital services business he was slated to run, he will soon be running a multibillion-dollar business with high hopes from the group that it can position Axiata as a next generation telco.
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