Asia’s telecoms leaders go all in on B2B growth at DTW Asia

“We want to make India the next powerhouse of manufacturing enabled by 5G and fiber.” We have come to expect bold statements from Jio, the world’s largest telecoms operator (by customers). But the operator’s pivot, from a focus on consumer services to enterprise solutions, as articulated by Senior VP, Aayush Bhatnagar, at last week’s DTW Asia conference hosted by TM Forum in Bangkok, is striking.

It is also one that many other operators in Asia, who also spoke at the event, are attempting. Jio is hooking up with other parts of the Reliance Industries conglomerate which spans energy, petrochemicals, natural gas, retail and textiles to pursue its ambitions. And it’s making small acquisitions along the way to give itself a head start. At the same time, it is pouring investment into 5G, fiber and 5G fixed wireless access. It will need a combination of these technologies to deliver corporate solutions.

This idea of digitizing other parts of the parent company’s business to get a foothold in new B2B markets is also one that Singaporean telco M1 is pursuing. M1’s parent company is Keppel Group, a diversified investment and industrial group. “M1 is the innovator within Keppel” Chief Digital Officer, Jan Morgenthal, told delegates.

For others, the communications infrastructure serves more as a springboard for innovation. The Malaysian industrial conglomerate, YTL Group, which has investments in ecommerce, utilities, construction contracting, cement manufacturing and property development, sees communications “as a utility investment”, Wing Lee, CEO, YTL Communications, told DTW Asia attendees, adding that “the internet is the ultimate digital utility.”

This view partly reflects the current market reality in Malaysia, where CSPs have had to go from a capex-intensive model to an opex model as they move towards 5G. In March 2021, Malaysia’s government, which has since changed hands, mandated the creation of a single, national cloud-native, wholesale 5G netco, called Digital Nasional Bhd (DNB), to serve the country’s existing telcos. YTL was the first Malaysian CSP to launch 5G consumer services on DNB’s network and currently it is busy building up its share of the consumer market.

But it also has its eye on the enterprise space and the group is building a data center to help reduce latency for future enterprise services, as well as consumer services such as gaming. “The key is that we don't look at the telco business as the only source of revenue,” Lee said. “Once you have a distributed architecture, the question for us is that how do we add value on top,” he explained.

Proofs of concept

For those operators which are not part of larger industrial groups, or which do not have existing, mature B2B businesses, reaching out to new potential customers and delivering proofs of concept is the only option. Thai telco AIS has partnered with local mining company SCG and industrial group Somboon for the delivery of mobile private network solutions.

Fellow Thai operator, True, has set up a trial MPN with a hospital. Like many operators across the region, True and AIS are planning to deliver 5G enterprise services on their macro 5G networks. But they are waiting for new core network technologies to allow them to offer differentiated and tailored connectivity capabilities. In the meantime, mobile private networks are giving them the opportunity to experiment and innovate.

Delivering new services to SMEs is a more realistic ambition for those CSPs that lack the skills, and market presence, to deliver solutions to large enterprises. Regional telecoms group Axiata is emerging as the poster child for delivering services by using a platform business model and exposing APIs. Its breakthrough strategy – 10 years after first experimenting with APIs, platforms and developers – occurred during Covid-19 lockdown when small businesses in two Axiata markets, Sri Lanka and Bangladesh, needed digital marketing and commerce capabilities to serve their customers. Doctor Hans Wijayasuriya, Axiata’s group CEO, revealed at DTW Asia that 4% of the company’s total revenues are now derived from the exposure of APIs (although a significant proportion of these revenues is handed back to partners via revenue share agreements).

Thai telecoms group AIS also used the Covid-19 pandemic to build out its SME business. It actually grew its revenues from SMEs over this period even though many small businesses collapsed. AIS started offering new digital marketing services and cloud solutions to the SME market in 2018 and 2019. By 2022 they were generating 30% of total SME revenues, according to Navachai Kiartkorkuaa, Head of Enterprise Marketing Management and SME Business Section.

Delivering new B2B solutions is going to need new skills, new partners and new business models. Asian telecoms operators tend to have a younger workforce than their European or North American counterparts. But they still face strong competition for software talent. Malaysian telco Maxis is investing in a young talent program in a bid to help create a “digital mindset.” It wants its new recruits to develop products and solutions for new markets such as smart manufacturing and smart agriculture. Filippino telco, PLDT, is training up graduates for its cybersecurity initiatives and delivering managed security services to its SME customers. Software engineers are not only needed to build new products. CSPs including Japanese telco Softbank and Axiata plan to bring systems integration for IT and networks in-house.

Partnering and ecosystems were a strong theme at DTW Asia. Axiata has built a community of 70,000 developers. But other operators are only now trying to figure out how they’re going to attract developers. Offering developers access to platforms, alongside APIs and other developer tools, is a prerequisite but this will not be enough in itself to lure developers. Only when Axiata started treating developers as customers and rolling out a program of education, coaching and co-creation did it see developer numbers ramp up, according to Axiata CIO, Anthony Rodrigo.

Changing the traditional “build-it-and-they-will come” mindset arguably represents the biggest obstacle to telecoms operators’ successful expansion into new B2B markets. As such, some of the comments from Jio’s Aayush Bhatnagar about how Jio goes about setting its strategic direction, and overcoming challenges, were particularly revealing. “We follow the principle of unconstrained thinking,” he told TM Forum CEO Nik Willetts. “When you find yourself in adversity, that is when you truly drive innovation.”

The evolution of the telecoms operator business has tended to be slow and predictable. But Jio has turned traditional thinking on Its head. “It is sometimes good to not know what you are getting into,” commented Bhatnagar. Time will tell how many other operators are prepared to change their whole way of doing business in the search for new markets and revenues.