PARTNER CONTENT: With more than 18 months passed since Ooredoo completed a $6 billion merger with CK Hutchison in Indonesia, President Director and CEO of the combined business Vikram Sinha opened up on the approaches taken to ensure a successful integration, ambitions around 5G, AI and collaboration and his strong stance on gender diversity and digital literacy.
Sinha revealed that almost 80 per cent of his time during the past year and a half since the merger completed has been spent on cultural integration.
“What has made me personally happy is very rarely do you see during the first 18 months of a merger, the employee satisfaction is actually going up.”
Speaking during a media briefing at TM Forum’s Digital Transformation World in Copenhagen, Sinha said when the merger to create the now Indosat Ooredoo Hutchison (Indosat or IOH) was finalised, he did not begin by chasing market cap, but instead he targeted scale, targeted maximisation and ensuring that the people in his workforce believed in the mission.
Testament to its work, the company’s market cap previously stood at $2.3 billion. Today, it is more than $5 billion, said Sinha.
Other impressive highlights have seen the company establish itself as the second largest telecoms operator in Indonesia, one of the world’s top 10 telcos with more than 100 million subscribers, a four-time rise in share price from IDR2,300 to IDR9,700 and enterprise value growth of 1.7 per cent to $7.7 billion as of June 2023.
Furthermore, early projections for combined synergies stood at $400 million in the first three to five years. However, Sinha revealed it had already exceeded more than $300 million in recurring synergies, putting it well on track to exceed previous targets.
In terms of network integration, Sinha said the entire process had been completed on the radio side, resulting in significant improvement on all customer metrics and contributing towards the company’s goal of delivering “marvellous experience”.
Telco to Techco
With the combined entity firmly established, Sinha believes now is the right time to embark on a journey from telco to techco.
The executive, however, warned it will be a learning process for the whole organisation. “Number one, we want to learn the best of techco. Number two, it is all about having this innovation, co-creation, coming up with products which are solving real problems and real challenges for our people in Indonesia,”
Indosat has based its techco strategy on a number of distinct pillars. Firstly, the company wants to empower Indonesia. “If you look at the telco space, the industry is growing four or five per cent. But if you look at the digital economy, the industry is growing 18 per cent. This is where we want to play.”
One of the key opportunities it has identified is in rural. Citing analyst research, Sinha said 22 million new users will join the internet economy in the next four years, meaning investment in this area is crucial, ensuring no-one is left behind in the digital revolution.
The second pillar is centred on delivering on the marvellous experience strategy. He said the company had embarked on this journey, creating 30 new initiatives and it was very much a 360-degree play.
Sinha explained it was all about providing a different digital experience, user experience and brand experience across the entire value chain.
“We are in the people business, how we connect to each other and how we respect each other. We can have difference of views, but we need to make sure we are very authentic.”
A third pillar lies in the company’s new innovation engine. Sinha explained the company was previous very inward looking but it addressed that by hiring a chief data and innovation enterprise officer. This resulted in the creation of an innovation experience hub in Jakarta, which the CEO believes is on par with Silicon Valley.
The hub’s purpose is to create products serving the needs of Indonesians, and the purpose is not to gain a valuation, but actually to add customer value and create real business.
Next, Sinha pointed to the value of collaboration. He expressed the importance of working with strategic partners to establish a model which is win-win. “In the value chain, we are all aligned. Our skin is in the game on the outcome on what we are trying to achieve.”
Indosat has a number of partnerships in place with strategic players, with the executive highlighting deals with Google, Tech Mahindra and banks in Asia. In terms of operators, Sinha pinpointed China Mobile. He said Indosat was working with the Chinese player to develop the entire ecosystem, especially on the enterprise side. In particular, Sinha is very impressed with their AI capabilities and work around home broadband.
“You have to collaborate, you have to work with all and you cannot be exclusive. You have to be inclusive and get everyone aligned, wherever you see an opportunity.”
To measure success, Sinha believes there are key data points, such as the amount of revenue it can generate from enterprise, as well as 5G.
5G and spectrum
To date, the company has rolled out 5G in close to 740 sites on existing spectrum, while “real 5G will start after the upcoming spectrum auction”.
Sinha said there is three frequencies on Indonesia’s roadmap: 700MHz, 2.6GHz and 3.5GHz, of which it expects 3.5GHz to be the best for 5G.
Using its existing spectrum, Sinha said the company has been piloting a number of use cases around Industry 4.0, as it looks to create a private, public ecosystem. It has also turned its attentions to private networks, and Sinha highlighted deployments in parts of the country.
“We saw that the community around it benefitted a lot. It’s not only private, it’s how you create this model and we are still learning to get it right.
He also questioned the real value of 5G deployments to date, adding that sometimes being late to deploy is good as you can take examples from other countries and other markets to create real value.
“Let’s make sure the investment is meaningful for our country, for our people. As the 5G’s keep changing, I need to make sure that we are sustainable and find ways to help the country and the customer.”
AI opportunity
Reflecting on Covid-19, Sinha believes the pandemic brought respect back to the industry as the importance of digital infrastructure became clear to all.
He noted that prior to the health crisis, the industry was rated even lower than tobacco companies “because of self-inflicted” problems such as high roaming charges. With a reputational recovery now underway, he said there is a need to go back to basics in getting core connectivity right, but also catching on to things like generative AI.
Indeed, in addition to 5G, Sinha like peers in the industry is embracing and exploring the opportunity that lies in AI. He believes generative AI is a very real phenomenon, with the ability to disrupt across a number of functions including HR, commercial and technology.
He says the company has set very ambitious targets on how the technology can have a positive impact, equating to a revenue contribution of around 20 per cent by 2026. It has also backed AI to help it reduce costs, and he said the agenda being driven Sinha himself is a “CEO mandate, not a functional one”.
Digital literacy
For Sinha, there is no question about giving equal opportunities to women. “They don’t need any favours and there is also commercial value in giving equal opportunity,” he said.
Indeed, Indosat has pushed equal opportunities in a number of ways, with the company supporting UN’s initiatives as well as the launch of the SheHacks programme to give women to have more prominent roles in the economy.
In two years since launch the SheHacks programme has helped 14,000 women develop their own businesses and SME products, sometimes through loans at 0% interest.
“I have seen personally that you just need to enable equal opportunities and then you will see how it will benefit you as a company, community and society.”
Sinha noted that even internally in an organisation there needed to be a change in mindset in marking roles based on gender.
“There’s a bias in thinking that women can do really well on customer service and experience. When it comes to IP, when it comes to technology, you will be amazed by how good they can be. So by design, you need to give them equal opportunity to deliver.”