Free Trial

Global Telecoms Business
Global Telecoms Business Copying and distributing are prohibited without permission of the publisher

Interview: Sandip Das of Maxis

06 October 2010

Maxis of Malaysia sets out to change lives throughout Asian region

Read more: Maxis Malaysia Axis IBM Aircel Saudi Telecom Sri Lanka Telecom

Sandip Das, CEO of Malaysia's Maxis, is enthusiastic about the impact telecommunications can have. At the same time he's enjoying the thrill of being active in Maxis's interests in India, Indonesia and Sri Lanka 


Sandip Das: a lot of red-eye flights as he travels around
Maxis's interests in India, Sri Lanka and Indonesia
Malaysia's largest telco has 13 million mobile customers, a 41% market share, an ebitda margin of more than 50%, and is developing fixed services over its own optical fibre network.
But that's not all that is outstanding about Maxis. In late 2009 it raised $3.6 billion in the biggest initial public offer of shares in south-east Asia, a transaction that gave it a market capitalisation of over $12 billion.
The company is looking to invest in LTE networks, and is talking to virtually all vendors to negotiate the best deals.
Maxis is at the centre of a complex network of companies. It owns Aircel, the innovative Indian operator (CIO Ravinder Jain interviewed here), plus 44% of Axis, the Indonesian operator (CEO Erik Aas interviewed here), and 43% of Sri Lanka Telecom, the Sri Lankan incumbent. In turn Saudi Telecom owns 25% of the main Maxis holding company.
"It means a lot of red-eye flights," says Sandip Das, the CEO of Maxis, who is also acting CEO for the Indian operation and on all the subsidiary boards. But Das seems to be enjoying the challenges.
Years ago Das ran a Toyota car franchise in Dubai, but he's glad he's made the change. "Telecoms penetrates to the masses," he says. "You would struggle to do that with cars. Telecoms changes social behaviour."
More importantly, mobile telecoms is playing a huge role in the development of nations, including China and his native India, where mobile will succeed where there is still a lack of basic infrastructure. "Telecoms will change their lives," he says.
But what he loves most about the difference between telecoms and the car business is the speed. "Telecoms is a very heady business," says Das. "You can make business plans on a Saturday night and you can observe the results on Monday." But you have to think on your feet -- and you have to be careful about what you're doing. 
Tightrope walk
And to run a telecoms company -- or a network of telecoms companies -- you have to do that. "You tightrope walk," he says. "You have to think about finance, technology, branding, dealing with the regulator and dealing with the government. You have to be an all-rounder."
Only 15 years since it was created, Maxis is not only the largest telco in Malaysia, but one of the largest companies on the Kuala Lumpur stock exchange. "We're up there with the banks and the airlines," he says. "Our brand is one of the top four in Malaysian business. In a country with 27 million people we've become iconic."
About half of Malaysia's population is under 25 years old, and a large proportion of them are internet users.
"The country has a very strong mobile market, with 118% SIM penetration," says Das. "The actual penetration is 70-80%. Has the market saturated? I would say so."
But there is still some untapped demand, he says, estimating SIM penetration will reach 140-150% in time.
Most of the growth will come from those under-25s using internet services, he adds. "Malaysians have a great ability to absorb data. There are 16.5 million internet users." The country has a high consumption of services such as MySpace, "and a great propensity to blog", says Das, who thinks the market has more than 150% growth left in it.
But this internet connectivity, not broadband internet connectivity: and that's where the opportunity comes, he adds. "Broadband penetration in Malaysia is low compared with our neighbours. We're at 37.5%." Penetration is higher in Thailand, Taiwan and other south-east Asian states, he notes.
As a result the government of Malaysia is "keen to take the escalator to broadband demand" and is "putting a lot of effort" into stimulating penetration. "Wireless broadband has grown fast, but fixed-line broadband is still sluggish, because there is a lot of copper in the network." 
National broadband network
The government has mandated the incumbent, Telekom Malaysia, to build a national high-speed broadband network using fibre, with a requirement that other operators -- including Maxis -- should be able to use the network on what are called "reasonable terms and conditions and on an equitable and non-discriminatory basis".
As Das puts it: "Everybody will have access. We see this as a catalyst to broadband growth, even for ourselves." However, Telekom Malaysia has not disclosed the terms of use yet. "We are working with Telekom Malaysia," says Das.
But Maxis has its own broadband plans. "We are working with the electricity company," says Das. The idea is to run fibre along electricity poles so that the company can deliver services on its own network. It has already connected 400 buildings in Kuala Lumpur.
Meanwhile Maxis is pressing ahead with its HSPA+ network, which was introduced in December 2009 and should cover 80% of the population by the end of 2010.
But Das refuses to get over-enthusiastic about mobile broadband. "The state of mobility is mature," he says. Voice revenues are falling and "data is not compensating for the loss of voice revenue". Maxis invested in data early, and now makes 37% of its revenue from non-voice services, "second only to DoCoMo in this region", but there is still a challenge.
Only a minority of data revenue is from text messaging, he emphasises, whereas two years ago 60% of that non-voice revenue came from SMSs. "Now more than half our population uses data over our network," notes Das. 
Telecommunications wallet
But what will Maxis offer as it moves towards becoming an integrated service provider? "IPTV, education, health, security," says Das. "We are quite happy to offer these so we have a better share of the telecommunications wallet."
Maxis has worked with almost all vendors in its life, it seems by deliberate policy. "When we were starting with mobile, our relationship with infrastructure suppliers was very different from what it is today."
He is looking at WiMax, TD LTE and straight LTE technologies "and looking for a vendor that can migrate with us", he says. "The infrastructure guys tell us this can't be painless."
The company's main initial suppliers were Ericsson and Motorola, "but now we're changing suppliers very aggressively", he suggests. Key vendors are now Ericsson and Huawei in Malaysia and also in the group's companies in India, Indonesia and Sri Lanka, "though the odd network here and there is Nokia Siemens Networks and ZTE". But LTE "could be completely different", he notes.
IBM is a key partner for Maxis in Malaysia, where the company has a contract for the complete transformation of its IT services to enable the future delivery of products and services. "We're now in our second year of implementing the system with IBM," he adds. The transformation process includes selecting and implementing customer-centric platforms and applications. "It's a full transformational model, developing full CRM," adds Das.
Das has built up a wealth of experience in the industry. A mechanical engineer by training, he first worked in the industry in 1994 when he joined what was then Hutchison Max Telecom, helping to start the company's operations in India.
It turned into Hutchison Essar and launched the Orange brand in India in 2000 -- in those days Orange was a Hutch brand, before France Telecom took over Orange UK the same year.
"We had the opportunity to create a premium brand," recalls Das. "We sold Hutchison Essar to Vodafone at a good price."
His brand experience has helped with Aircel, he notes. "We were known as a regional player. We had to be more mass market. Just like Malaysia, India has a very large population of young people." 
Pocket internet
Aircel decided to turn itself into "a pocket internet company", says Das. That brought in premium customers -- though Aircel's sponsorship of cricket and its campaign to save tigers also helped to raise its image. "For Aircel, data usage grew from the smallest to the largest percentage of revenue."
In India, as in Malaysia, "the next stage of growth is broadband", he adds. Aircel is one of the biggest investors in 3G spectrum in India "and we are very excited".
Meanwhile he is also active in the company's investment in its Indonesian operation, which "started with the wrong model" but has now changed.
"I have a very happy mix of countries," says Das. The scale -- Malaysia, India, Indonesia and Sri Lanka -- enables him to negotiate good prices. "Malaysia is at the top end of the value chain," he notes: the country is "in many ways absolutely contemporary with everywhere else", he adds.
In telecoms, particularly: "We've just trialled LTE," he says. "We have a fantastic content range. And now we're trying to get synergy."
And now he's turning his attention more to Sri Lanka, where Maxis is a partner with the government in the incumbent telecom operator. "Sri Lanka Telecom has great strengths. The mobile company is very innovative. It has launched an educational service with the university of Colombo. We see ourselves as a company that can help Sri Lanka get on the information highway."
The government "has been extremely supportive" and Maxis has been contributing its experience.
Is there room for more? Already active in four large Asian countries, the Maxis group is "open to opportunities", says Das, "but at this point there is little thinking space" because of the big investments the company is making in its operations. "We have our hands full. These are jewels in our crown and we want to shine them." GTB

Further reading:
GTB interview with Erik Aas, CEO of Axis
GTB interview with Ravinder Jain, CIO of Aircel 
GTB news reports: 
Huawei wins Maxis FTTH contract
Malaysia's Maxis plans $3.4bn IPO
Maxis to invest $427m in network upgrade