Even in Fast-Growing SE Asia, Commoditization and Margin are Big Issues

source: Statista
South Asia and Southeast Asia are parts of the world where communications growth (subscribers and revenue) remains among the highest in the world. Unlike some other regions, huge upside remains for uptake of mobile phone service and Internet access, for example.

Still, service providers from Southeast Asia have many of the same concerns as their counterparts in regions where revenue and subscriber growth is slow or negative.

During a recent course attended by executives from service providers from Angola, Brunei Darussalam, Cambodia, Indonesia, Philippines, and Thailand, a litany of business challenges that would be familiar in many other regions were mentioned.

Declining profit margins already are an issue, even if retail growth opportunities remain. As elsewhere, “commoditization” of telecom services is an issue.
source: AT Kearney

“We need to differentiate our services” was a common theme, as telecom services are not viewed as “sexy,” compared to devices or apps.

Competition from over the top competitors already is an issue, and managers wonder whether cooperation is possible.

With the growing importance of Internet access, executives said providing greater capacity was a definite issue.

Service provider managers also said they were concerned about the ability of their firms to “execute” in a fast-moving and competitive environment where innovation is difficult.

Organization skills also are seen as issues. “Do we have the right skills; and if not, how do we acquire those skills” was seen as a challenge.

Also, as you might guess, in a region with significant populations living in hard-to-reach areas, local connectivity was viewed as an important issue, as costs are too high.

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The meeting, held in Nonthaburi, was organized by the Pacific Telecommunications Council and  sponsored by APTelecom and hosted by TOT Academy.

Instructors included:
  • Sean Bergin, President, APTelecom, Thailand
  • Anup Changaroth, Director, Portfolio Marketing, Asia Pacific, Ciena,Singapore
  • Eric Handa, CEO, APTelecom, USA
  • Aamir Ibrahim, dtac, Thailand
  • Sam Johnston, Director, Cloud & IT Services, Equinix, United Kingdom
  • Gary Kim, Founder, Spectrum Futures, USA
  • Rozaimy Rahman, EVP, TM Global, Malaysia
  • Chris Wilson, International Head, TIME dotCom Berhad, Malaysia
  • Qian Zhong, Managing Director, Asia Pacific Sales, TE SubCom, USA

Even in high-growth regions, telecom professionals are dealing with some issues common with their counterparts in slower-growing regions. Product commoditization and declining profit margins are salient examples.

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