TM positioning itself to capture IoT, smart city growth

• CEO Zamzamzairani sees exciting things happenings
• VADS being positioned to play leading role in market

“I AM still excited about VADS,” Telekom Malaysia Bhd (TM) group chief executive officer Zamzamzairani Mohd Isa (pic above) told a media briefing on TM’s 2014 financial year (FY 2014) on Feb 26.
 
Zamzamzairani had first declared his “excitement” over the future prospects of VADs during TM’s Q3 (third quarter) 2014 briefing.
 
VADS Bhd is the ICT services and business process outsourcing (BPO) subsidiary of TM that is focused on the growing shared services and outsourcing trend which goes by a variety of acronyms such as ITO (IT Outsourcing), KPO (Knowledge Process Outsourcing) and CCO (Contact Centre Outsourcing).
 
VADS revenue, which TM classifies under ‘Others,’ saw a 9.5% revenue growth in FY 2014 to RM1.048 billion versus RM957 million in FY 2013. [RM1 = US$0.28]
 
Despite this growth, none of the five research house notes on TM, which Digital News Asia (DNA) obtained, saw fit to highlight VADS as a catalyst for future growth.
 
But that may just suit Zamzamzairani, who half-jokingly remarked that TM’s earnings press conference could hopefully remain low profile, on a day when a number of high-profile companies were also announcing their full-year results.
 
VADS itself has recently seen a slight reshuffle, with its chief executive officer (CEO) of the past three years, Ahmad Azhar Yahya, moving back to TM, being replaced by Massimo Migliuolo.
 
A 12-year Cisco veteran, Migliuolo joined TM in 2014 as vice president, Real Estate, Managed Accounts. He is also CEO of Intelsec, a TM company focused on delivering smart services to vertical markets, specifically in the context of cities and urban areas.
 
With its enterprise revenue having gone up 9.5%, TM will be placing extra focus on this area, with “exciting things happening in this space” especially in managed accounts, Zamzamzairani said.
 
TM has beefed up the number of account managers at VADS and is putting an increasing focus on industry verticals, with its layer of ICT services being seen as a more horizontal service to customers.
 
As Zamzamzairani said, “Today, every company needs a minimum level of technology, from email that is robust to security solutions.”
 
It is when focusing on industry verticals that TM will offer deeper and more personalised services.
 
Here, Migliuolo’s background serves to offer a clear idea of what some of these services will be. At Cisco, he not only had led its vertical markets push which included smart cities, but had, at some point, led Cisco’s global mobile market segment and implemented the company’s vision for mobile service providers.
 
In July 2014, TM’s Italian chief technology and innovation officer Giorgio Migliarina had already indicated to Digital News Asia (DNA) that the telco giant sees smart city solutions and the Internet of Things (IoT) as a potential market opportunity, and was creating a portfolio of services to serve this emerging market in Malaysia.
 
That same month, it raised its interest in this space, starting with the joint venture it announced with Iskandar Innovations and UEM Sunrise to offer smart services.

READ ALSO: MWC 2015 wrap-up: Wearables and IoT the next growth areas?
 
The imminent fourth quarter launch of its mobile services will not only help it become a quad play, but also help strengthen its smart city solutions by offering ubiquitous connectivity.
 
For now, this emerging area falls under what Zamzamzairani described as “fix and improve the here and now of the business, and invest for future growth.”
 
Investing in future growth comes through the estimated RM700 million contract that TM will soon announce to upgrade, integrate and expand out its mobile network, which currently is built on the 850MHz, 23GHz and 26GHz spectra – the latter two courtesy of its March 2014 acquisition of a 57% stake in Packet One Networks Sdn Bhd (P1).
 
At least one research house has pinned its hopes on the launch of that mobile network as a catalyst to re-rate TM. AmResearch said this move could be a possible re-rating catalyst with the caveat that TM has to stomach P1’s losses in the near term.
 
It remains to be seen however if it is the offering of mobile services, voice and data, that is the catalyst, or that mobile services become the platform for TM to build out its IoT and smart city solution offerings.
 
Right now, it seems like the various research houses have not factored this in as a potential major boost to TM in the future. One suspects that’s just the way Zamzamzairani likes it for now.
 
Related Stories:
 
Can IoT save Malaysian telcos?
 
TM targets year-end to launch mobile services
 
TM open to talks with any party to ‘fill up gap’
 
From smart cities to ‘sensible’ cities, via IoT
 
 
For more technology news and the latest updates, follow us on Twitter, LinkedIn or Like us on Facebook.