TechCo, but for a Reason : The Transformation Journey of Indosat Ooredoo Hutchison

Having effected a merger and overseen growth across the business, CEO Vikram Sinha outlines why and how he wants to move Indosat Ooredoo Hutchison to a TechCo model.

Indosat CEO Vikram Sinha speaking at DTW23.

At DTW23, TM Forum CEO Nik Willets provided a Euro-centric diagnosis of the telecoms industry in the opening session. Growth is hard to come by, return on capital is very poor, and operators cannot monetise on service opportunities. The answer, he said, is to move to a network-as-a-platform business model that exploits an automated network whose capabilities are exposed via open APIs to waiting developers.

But Indosat Ooredoo Hutchison (Indosat or IOH) CEO Vikram Sinha reminded attendees that the telecoms world is about more than Tier One European group operators.

Growth, it seems, is not a problem for Indosat and its CEO Vikram Sinha. He reminded journalists during a press conference that he is CEO of a top ten mobile operator by subscriber numbers, in the fourth most populous country in the world.

Since he took over the company’s market capitalisation has grown from $2.3 billion to over $5 billion. The share price has grown four times, and ARPU is up 4%. Sinha takes particular satisfaction from another stat showing growth – employee satisfaction.

He points to latent demand in Indonesia’s rural population and birth rate as a funnel for more growth – 23 million more internet-connected customers in the next four years. Allied to that is an untapped SME market, which is ready to benefit from increased connectivity.

Why TechCo now?

So amidst the talk of transformation, of telco to techco and as-a-platform business models, Sinha feels that he doesn’t need to jump on the trend just because others are doing so. Instead, he wants to identify the opportunities that ride on top of Indosat’s connectivity, identify the right partners and operating models, and then roll out services at scale that add value to Indosat’s customers.

“I could have talked about transformation a year ago but it would have been just a headline. The timing is good now. You need to know your house is in order, and after 20 months post-merger, we can move from integration to transformation.

“We feel we have all the ingredients and that is why we are embarking on this journey.”

The move to the TechCo model is all about taking IOH to the next level in terms of being able to use new technologies – cloud, data, AI – to structure operations and create new services.

“What is TechCo for us? It is all about innovation and co-creation coming up with products which solve the real problems and challenges of our people in Indonesia.”

Sinha said that with the digital economy growing 18% annually, “This is where we want to play.”

Methodical approach

The goal is to move IOH’s “adjacent revenues” from a current 4% contribution to the topline up to 20% by 2026. Sinha also wants to see enterprise revenues reach 20% of the total. And he wants 16-20% of revenues to come from products that are less than five years old.

To do that he is taking a methodical approach. The company has identified 100 performance champions, and these are leading their tribe within the company to bring people together to address the Techco opportunity, breaking down operational silos.

It has opened an innovation centre that Sinha says is the equal of any in Silicon Valley. It is partnering with the likes of Google Cloud, Tech Mahindra and most recently signed an MoU with China Mobile International, to identify and develop opportunities in communications, data centres and cloud services.

It wants to see a platform where data is “democratised” across all functions, where onboarding of new partners is “100% API-driven” and where AI is used operationally to drive network predictability, with LLMs used in-house for deployment.

“We make sure we learn from everyone,” Sinha says, “especially those with experience of scale, such as those operating in India and China.”

One example is with China Mobile, which has impressed Sinha with its application of AI to large scale rollouts and to home broadband delivery.

Sinha added that GenAI “has the ability to disrupt across functions” and said he has put in place “a very ambitious target” as to how the digital AI can help Indosat have a positive impact on its revenue.

“We have taken an ambitious target and we are getting into use cases. Similarly, we are looking at how it can help us on personalisation. Then we are looking at how it can help us reduce cost. Do we have all the answers? No. But it’s a CEO mandate not yet a functional mandate: it has to be embedded across the organisation and we have to make sure we are ready.

“GenAI puts everyone on the same page. How we take off from here is what we are focussing on,” he said.

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