Week in Review: Learn from Axiata, Corporate Malaysia

• Telco embarked on digital strategy in 2014 with full support from the board
• Malaysian corporates can learn much from Axiata’s ongoing digital journey

First, the company announces that its digital subsidiary has secured a high eight digit millions investment from a leading Japanese conglomerate which has valued it portfolio at US$500 million. The same Malaysian company then follows up with an even more exciting announcement. An ambitious and audacious proposed game changing mega merger with a competitor in Asia.

If anything the hot news of the past week and a half has shown is that Malaysia, finally, has its digital champion. The fact that it comes, not in the shape of a hot startup, led by a charismatic CEO raising bucket loads of cash, but by a large brick and mortar company led by a world-class executive is a surprise. But Jamaludin Ibrahim, president and chief executive officer of Axiata Group Bhd is a leader who marries his telco experience with a rich technology background, and who has seen how companies which do not evolve and adapt to technology driven trends, become footnotes in history.

The strategic investment into its digital portfolio, under Axiata Digital Sdn Bhd, was made by Mitsui Co and announced on May 3 while the proposed mega merger with Telenor ASA’s Asian operations was announced on May 6. That proposed merger has analysts purring their approval, with both Telenor and Axiata’s share price rising through the week.

Around 2010 the media was rich in articles about how nimble and well funded OTT or over-the-top startups were going to disrupt telco companies. Today the term OTT has disappeared, replaced by “streaming” companies. But the perceived scale of threat to the business models of telcos remains.

But back in 2010 Jamaludin was not about to allow Axiata to get caught ignoring or dismissing the threat of being disrupted. As he told me in a 2014 interview he had no intentions of committing “the worst sin” which in his eyes was, “watching others as they execute”.

And execute Axiata did, from 2014 onwards. The planning started in 2011 with the pace ramping up dramatically in 2013 when the Axiata board boldly committed US$344 million towards realizing the company’s digital ambitions.

Jamaludin gives full credit to his board for making such a bold commitment. Yet, I am sure he himself played a major part in convincing the board that if Axiata wanted to ensure it was a winner when the dust settled after the coming disruptive digital wars, then it had to play to win and play hard.

I don’t think any listed company in Malaysia has made such a bold bet on digital, even though many of them will have to face the reality that digital will be both a disruptor and enabler for their businesses. It is in the hands of their boards and senior leadership teams to decide whether they want to ride the digital wave, that is already here, to be winners or risk being swamped by it.

And for all those who are uncertain or afraid of moving boldly to seize the opportunities from digital disruption, then the rapid strides that Axiata has made and the lessons it has learnt with mistakes made along the way, will serve as an instructive template for Corporate Malaysia to learn from.

But one key lesson, besides the large amount that Axiata was willing to invest, is that digital initiatives take time to come to fruitation. For instance in my 2014 interview with Jamaludin he thought that the fruits from Axiata’s digital strategies would start to show in 2016. He wasn’t willing to say much before that, well aware that, “mobile telcos don’t have credibility yet” when talking about their digital strategies.

Indeed success did not arrive in 2016 and in fact, in 2017 Axiata made the pivotal decision to refocus their efforts into three verticals they felt they could compete and win in. It was from that decision that they really started flying.

Today, I suspect, Jamaludin and Axiata now have that credibility – bucket loads of it. And, I hope Corporate Malaysia beats a path down to knock on Axiata’s door to learn from them. For any country, in this digital world we are moving into, can only be as successful as its companies are in maneuvering and adapting their business models and cultures to capture the opportunities the digital economy throws up. And Malaysia needs many more of its Brick & Mortar leaders to be like Axiata. With that, I wish you a productive week ahead.