KUALA LUMPUR (May 12): Axiata Group Bhd president and group chief executive officer Tan Sri Jamaludin Ibrahim said while the mobile telecommunication network provider expects some short-term impact to its profit and loss (P&L) due to the Covid-19 pandemic, the company will emerge far stronger in the longer term, as the group kickstarted 2020 from a position of great strength.
Jamaludin said in Axiata’s latest annual report, which was filed with Bursa Malaysia today, that the group kickstarted 2020 with a solid profit trajectory, robust balance sheet and cost management well on track.
"Given that we are starting on a strong footing and fundamentals, we are confident that we are able to navigate the storm ahead.
"The impacts of Covid-19 are far more devastating than the 2008 global financial crisis, which primarily led to a worldwide economic fallout. Today, we are staring in the faces of multiple global crises, further compounded by public health concerns, escalating job losses and emerging social issues that will add further pressure on an already challenged global economy. This situation is unprecedented and fraught with uncertainties.
"To adjust Axiata to the new normal, we are brainstorming on what the future will look like. If we prepare right — in terms of our network, products, distribution and customer service — we believe we might be in an even better position in two years’ time, compared to pre-Covid-19,” Jamaludin said.
In a post-Covid-19 world, there will be winners and losers, according to Jamaludin. He said the new normal will be driven by changes in consumer behaviour, as people strike the balance between health concerns, with work obligations and lifestyle needs.
He said he foresees e-commerce as one of the big winners in the future, driven by more evolved digital lifestyles. Business norms will change, as corporations choose to conduct online video conferences instead of travelling to other countries for short meetings, which in turn will adversely impact the aviation and tourism sectors, according to him.
"Over the next year or two within the short and medium-term, telcos will be relatively better off compared to other sectors, but will still be negatively impacted. However, beyond that period of time, I believe telcos will be one of the strongest drivers of economic growth. Telcos will not only be the connectivity platform as a required basic utility for a functioning society, similar to the water and electricity utilities sectors, but also provide many digital solutions and services to businesses.
"In a post-Covid-19 world, SMEs will have no recourse but to digitise their solutions, in order to effectively manage daily operations and supply chains. The underlying basic need for both consumers and enterprise will predominantly be broadband and mobile services. Some businesses will choose to engage alternative telco suppliers to ensure continuous service,” he said.
For Axiata, Jamaludin said opportunities lie in selling fixed wireless access and broadband to the enterprise segment. Axiata’s enterprise business will be well placed to equip SMEs with the digital tools and platforms they need in the new normal, such as software to conduct online meetings and Cloud applications to access files online, as well as the knowledge and skills to adapt to working and conducting businesses digitally.
"The possibility for innovations in industry solutions such as logistics, healthcare, agriculture and tourism are immense and exceedingly exciting! We will be looking at different ways of selling our products and services, leveraging on IR 4.0 technologies such as virtualisation to meet new demands in retail, healthcare and education,” he said.
At Bursa today, Axiata’s share price closed unchanged at RM3.89 for a market capitalisation of RM35.67 billion. The stock saw 3.86 million shares traded.
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