Headline CELCOM`S BIG DIGITAL DRIVE MediaTitle The Star Date 01 Feb 2020 Language English Circulation 175,986 Readership 527,958 Section Star BizWeek Page No 6,7 ArticleSize 2002 cm² Journalist ZUNAIRA SAIEED PR Value RM 302,259

CELCOM'S BIG DIGITAL DRIVE Telco operator embraces artificial intelligence, the Internet of things and data analytics in its bid to become the nation's most inspiring digital organisation by 2022 By ZUNAIRA SAIEED "There will also be many exciting [email protected] product launches such as new pack- To become a digital nation, ages and services within the first- ONCE a traditional mobile operator, half of the year," points out Idham. Celcom Axiata Bhd is on a roll to we need to build Malaysian He says the revenue growth from become a digital service provider, the 5G network will only contribute in line with the global telecommu- and materialise in the financial nications industry that is changing capabilities and a sustainable results of 2021 and 2022. faster than ever. For the six months ended June 30, The paradigm shift to digital is ecosystem made up of 2019, Celcom reported a profit after fully underway, as players continue tax and minority interest was up to see shrinking revenue streams Malaysian companies. 11.7% to RM365mil from RM327mil driven by over-the-top (OTT) com- a year ago due to savings from con- petitors, and finding new areas of Idham Nawawi tinuous cost-optimisation, partly growth to remain relevant becomes negated by higher costs from net- a crucial step, going forward. work expansion. While Celcom is not far off from However, total revenue for the its ambitious vision to be the period fell 7.9% to RM3.33bil from nation's most inspiring digital RM3.61bil previously, attributed to organisation by 2022, the telco oper- the revision of wholesale rates. ator has already started to adopt For the financial year 2020 (FY20), and embrace artificial intelligence Idham says the company has allo- (AI), the Internet of things (IoT) and Xperanti IoT, to commercialise IoT allow its employees to think beyond some of its IoT devices constituted cated a capital expenditure (capex) data analytics in every aspect of its solutions and accelerate the adop- just traditional mobile services. around 10% of Celcom's revenue of around RM800mil to RM900mil operations. tion of IoT in the country, signifying For instance, startups like Grab last year. mainly to strengthen the network, The group has implemented its commitment to the development have solved transportation prob- In the next two to three years, improve the quality of the network more than 20 different aspects of of the nation's digital ecosystem. lems that brought convenience to Idham targets to double its revenue and network experience. IoT, robotics and AI to innovate its The man behind these innovative customers and Idham is aware of in providing IoT devices for enter- "This figure is a general guidance daily work processes, including in initiatives to optimise the digital the huge potential that social value prises. Currently, Celcom is power- we have given to analysts. This year, customer service, marketing and transformation agenda is chief holds for Celcom, given the gradual ing its IoT solutions to more than we are focusing more on the quality human capital. executive officer Idham Nawawi, decline in revenue from traditional 1,500 companies nationwide. of the network and better customer Recall that at the beginning of last who had previously led the Axiata telco services. Another source of growth is its experience rather than the expan- year, Celcom, a subsidiary of Axiata Transformation Programme 2.0 "Behaving like a startup will also expansion of home fibre broad- sion of the network," he adds. Group Bhd, allocated an investment from 2012 to 2015. He was also accelerate the speed on deci- band, offering its services through- This compares to a capex of RMlbil of RMlOOmil for the next five years instrumental in establishing the sion-making and executions inter- out Malaysia from initially only in in FY19, RM1,06bil in FY18, RM1.28bil to develop its digital innovation RMlOOmil Axiata digital innovation nally. It will allow Celcom to be a Sabah. in FY17 and RM1.33bil in FY16. hub, IoT centre of excellence (CoE) fund, which was set up to help risk-taker, be innovative and pro- However, Idham is looking for- Celcom says it has the strongest and IoT-related infrastructure in bumiputra companies upscale their duce products that will have a social ward to a new source of revenue for and largest network in Malaysia Malaysia. products in the digital sector to impact," he says. Celcom in the next few months with a 4G population coverage of The CoE, which includes network, become regional champions. One of the key startup traits after the commercial availability of 93%, while 4G LTE-A coverage has content, research and ecosystem But will re-innovating Celcom shown by Celcom is providing IoT the 5G cellular network in the sec- increased to 81%. developments in the country, digitally be enough to withstand the solutions to a government agency ond-half of the year. Currently, the telco claims over marked Celcom's commitment to sector's vulnerable shifts in technol- using the fifth-generation (5G) He says the telco provider will 11,000 sites across the country, the fourth industrial revolution. ogy cycles, competitor actions and mobile network on trial in introduce new value-added prod- including 9,000 LTE sites. The telco Notably, the company has also customer needs? Langkawi. ucts and services on the 5G network also claims to have over 96% LTE been working on initiatives with Banking on more than 25 years of In addition, the telco operator is in the second-half of the year, given population coverage in 10 states, electricity provider Tenaga Nasional experience in the telecommunica- looking forward to building its AI that its speed is at least 10 times including Penang, Selangor, Johor Bhd on smart metering, as well as tions industry, Idham tells capabilities, which in return will faster than the present 4G network, and Perak. national carmaker Proton Holdings StarBizWeek that a crucial step the provide more services to enterpris- with speeds going beyond one giga- Given the "hyper competition" Bhd on providing network connec- telco operator is embarking on is es this year. bit per second. between telco players, Idham notes tivity to their vehicles. turning around Celcom into a The efforts from transforming "First, we will introduce trial ser- that Celcom is focusing on improv- Not forgetting that Celcom recent- 32-year-old startup. Celcom have also created new areas vices such as cloud gaming and ing its profitability and efficiency ly partnered with Malaysia's He explains that re-innovating of growth for the telco operator. entertainment services that run on while reducing costs and redundan- licensed IoT network provider, Celcom to behave like a startup will For instance, commercialising the 5G network this year. cies this year. Headline CELCOM`S BIG DIGITAL DRIVE MediaTitle The Star Date 01 Feb 2020 Language English Circulation 175,986 Readership 527,958 Section Star BizWeek Page No 6,7 ArticleSize 2002 cm² Journalist ZUNAIRA SAIEED PR Value RM 302,259

Below are excerpts of the interview with Idham Celcom has set itself the ambitious goal of becoming the nation's most inspiring digital organisation by 2022. How do you intend to do it? Yes, we have set a very aggressive date of 2022. It is our vision. It is not about being Google. We want to develop or provide services that are digital in nature. We also provide platforms and a backbone where companies can transform themselves to become digital entities. We will need to trans- form our processes and the brand of Celcom to remain relevant for our dealers and customers, and even employ- ees who interact internally within the organisation. For our customers, with the aim to deliver the best experience, we will continue to listen to their needs and work towards being disruptive within the market by constantly innovat- ing our products and services to deliver what our users want. Another way we are transforming is by playing a major role in the IoT space by helping companies to operate digitally. For example, Proton X70 is riding on our network. We help fanners in fish ponds by providing connectivity of the sensors for fish to be maintained at an optimum tem- perature. We are also using IoT sensors in oil palm planta- tions for companies to earn better returns. The process has already started, and in the next two years, the adoption will accelerate. As you can see, there is much more than what we are doing. Being a mobile provider is only one part of our business.

Celcom says it wants to transform itself to become a balanced company. Could you please elaborate on this? We are guided by the Celcom compass that will trans- form us into a balanced company. It is simple to remember - if our employees lose direction, all they have to do is look at the compass to guide them. In the north, it is about giving our best to our customers, as we want to be one of the most One key strategy to compete with loved telco brands in the country. In the south, it is about the other telco operators is to reduce CELCOM'S 5G SET TO our internal policies for the well-being of our employees. the operational costs and automate We want to transform ourselves to become a 32-year-old IT tools that will improve efficiency startup. of the company, he says. BENEFIT GOVT, BUSINESS In the east, our priority is to become a high-performance However, Idham says Celcom will company, as we have a responsibility to our shareholders farther intensify its focus on opera- and stakeholders. I told my team that if we are not a tional excellence, while being more Celcom Axiata Bhd aims to expand its high-performance company, then nobody would want to selective in making investments 5G Safety and Security Smart City work with us. So, we must transform Celcom into a high-per- this year. solutions for multiple agencies nation- formance company which relates to our performance man- "We have to be more careful in wide. agement system and our reward system for our employees. how we invest. We are only inter- At present, Celcom is in collabora- The challenge for Last but not least, our focus is on building a digital ested in making investments in AI tion with Langkawi's Royal Malaysian nation. Celcom is not here to make short-term profit. Some for our internal operations as well Police (PDRM) and the Langkawi Celcom is to strike of the things we do are more crucial than the return on as investments in managing net- Municipal Council (MPLBP) on an ini- investments. This includes our programs in developing our work traffic, as we want to make tial 5G trial run to deploy its Internet a balance between vendors. Why do we do it? sure everyone gets the best service," of things (IoT) solutions for an This is because we have the responsibility of building he adds. enhanced security monitoring system providing high- Malaysian capabilities and an ecosystem made up of On the industry outlook, most that will transform Langkawi into a Malaysian companies. For example, we help the B40 seg- brokerage firms have a neutral more secure destination. quality products ment that cannot afford to get the best education. We go stance on the telecommunications Celcom's 5G trial run ends in March beyond our normal business and short-term profit. We are now being more precise in our goals in transforming sector, given the weak mobile and 2020. and services and fixed revenue growth prospects. However, Celcom's chief executive Celcom to become a balanced company. Despite the neutral outlook on officer Idham Nawawi says the telco offering affordable the telco sector, Ambank Research provider's IoT solutions could become What is Celcom's key focus this year? is keeping a buy call on Axiata a useful tool for multiple government prices. The telecommunications market has been plateauing. Group, given its low earnings agencies, including the Royal Our focus is on improving productivity and the bottom line before interest, tax, depreciation Malaysian Customs Department. of the company and reducing cost while maintaining the and amortisation valuations and "We are looking at IoT solutions top line. It has been a highly competitive market. It is not a rising prospects for monetisation of that can not only be used by the Celcom began its first-ever 5G jour- growing market. If the market is growing even in high sin- its multiple businesses. PDRM, but also by various govern- ney with Ericsson in May 2017. Since gle digits, we would be happy. But the market has not been For this year, Idham expects ment departments," he adds. then, the telco provider has been growing. the telco industry to have flat When asked on the response for the enhancing its core network and radio Our focus has been on the profitability of the company growth due to a lack of new sub- 5G trial run in Langkawi, Idham notes access equipment with the latest tech- and on operating at a lower cost than before, while reduc- scribers, coupled with the broad- that it has been a positive experience nology in the market, paving the way ing redundancies and being more efficient. band and mobile service price for the PDRM, as it offers a break- for innovation in Malaysia. We are also focusing on operational excellence. For 2020, cuts from the competition of through in security and monitoring According to the Malaysian it is about growing revenues in the three areas, namely, IoT, other operators. effectiveness with multiple 4K pano- Communications and Multimedia home fiber solutions and new value-added services that "As it is, traditional mobile servic- ramic live video surveillance cameras Commission (MCMC), the commercial- capitalise on the 5G network. Internally, we are focusing on es are not seeing much growth, and installed on the island. isation of 5G technology will take operating in a much more efficient way to improve profita- this is why new growth areas He hopes that various enterprises, place in the second half of this year. bility. Our focus is also on building artificial intelligence including new services and applica- authorities, and the private and pub- Idham says the company will be (AI) capabilities. tions for enterprises must be intro- lic sectors can take advantage of rolling out new digital value-added We want to look into AI capability for network planning duced to have better growth in the Celcom's IoT solutions to generate bet- services after the commercialisation and managing network experience. At the same time, we telco industry," he says. ter returns. of the 5G network, which includes want to focus on using AI to provide services to enterprises Idham says the challenge for Celcom's 5G Safety and Security cloud gaming and entertainment ser- in the areas of surveillance. Celcom is to strike a balance Smart City Solutions was demonstrat- vices. between providing high-quality ed to Prime Minister Tun Dr Mahathir "We are also looking at a new type What kind of challenges are you expecting? products and services at an afforda- Mohamad and Communications and of content that can ride on the 4G net- We have to outdo the competition. Firstly, we need to ble price. Multimedia Minister Gobind Singh work and eventually the 5G network," know internally just how ready the company is to do this. And with the 5G network rolling Deo during the recent 5G demonstra- he adds. Secondly, our challenge is also consumer readiness. It is not out in the coming months, he points tion project in Langkawi. According to a Malaysian Institute only about giving the cheapest network to our consumers, out that telco providers will attract "Celcom will be expanding its 5G of Economic Research report, the eco- but also about making sure that we get the best coverage customers based on their products use-cases to also cover Crowd Control nomic impact of 5G implementation and a strong network. The challenge is that consumers and services rather than the Monitoring, Digital Boundary Control, in Malaysia will contribute up to want the cheapest network, but the quality of the service is strength of their network. Geo-Fencing and Smart Perimeters, RM12.7bil to the nation's economy also important. The challenge is how to balance the right "One of the biggest transforma- and 5G Fixed Wireless Access," says between 2021 and 2025. experience at the right price. tions that Celcom has to do is to be Idham. "The implementation of 5G will also Another challenge is that the industry growth is likely to more competitive in the services we He points out that the telco provid- create more than 39,000 new job be flatfish this year, mainly because we see a trend of con- provide," Idham says. er is providing services that are differ- opportunities during the period," it sumers moving from one network to another. However, we As digitisation will touch every ent from a traditional mobile opera- points out. don't see new subscribers coming in, as everyone is already aspect of Celcom's business, the pri- tor, signifying that Celcom is re-inno- Moving forward, Celcom is commit- on the network. Plus, you can see the cut in prices of broad- ority of the telco operator has shift- vating the brand as a whole. ted to driving the 5G technology for- band services due to immense competition. If you couple ed to the quality of its products and To date, the telco provider has pro- ward as it continues to enhance daily this with falling revenue from traditional mobile services, services rather than the expansion vided its IoT sensors to more than operation matters for local businesses you won't see much growth in the industry, unless new of its network. 1,500 companies nationwide. and authorities. growth areas are created.