Pakistan’s Dawood Group and Malaysia’s edotco have become partners in Pakistan and the local company edotco Pakistan has revealed its plan. In an exclusive interview with Pakistan & Gulf Economist, Suresh Sidhu Chief Executive Officer of edotco Group talked about various facts of the joint venture. Following are the excerpts from his conversation.
Your company is mostly operating in South and South East Asia, are there some specific reasons for selecting this part of the world?
As you may be aware we are a Malaysia based company and believe that we know the countries located in this part of the world better. The other reason is that many of the markets have already reached saturation level, which does not offer chances offering next generation technology as well as rapid. As against this Cambodia, Bangladesh and our latest entry in Pakistan offers enormous growth potential. On top of all we consider that it is our obligation to first cater to the needs of our neighborhood and then try to expand our outreach.
What are the reasons for selecting Pakistan and what sort of growth do you foresee in the country?
While the numbers of reasons are many, I would prefer to refer a few only that makes Pakistan a preferred destination for investment. These are: 1) population of the country, 2) penetration of cellular phones, 3) growing market of data transfer, 4) business friendly policies of the Government of Pakistan and 5) economic indicators suggesting that per capita income is growing at a reasonably fast pace.
Pakistan has moved to 3G and 4G technologies at a very fast pace. And now it is the time to improve quality of service, outreach and on top of all bring down cost of doing business. The telcos have already demonstrated their commitment to Pakistan and its people by investing billions of dollars. We believe that a company like us can help the telcos in achieving the above stated targets and the ultimate beneficiaries will be Government and the people of Pakistan.
How much does your company and the local partners intend to invest and would there be new job opportunities
As our business model consists of acquiring the existing towers and also constructing towers in less served areas, we believe that the anticipated investment of over USD1.5 billion can reach Pakistan at a very fast pace due to the fullest supported by the regulatory authorities. Having said that I believe the quantum of investment is directly dependent on the quantum of business we are able to generate and the growth of number of satisfied customers of telcos and other clients.
Pakistan also suffers from high cost of electricity and outages, how do you intend to overcome these two contentious issues?
Pakistan is the only country that faces these two contentious issue. Our company offers solutions for both the problems. We mostly use solar or renewable sources of energy, which are dependable, cost efficient and above all spread less pollution. Since our company offers sharing of towers, we are confident that cost of energy, which is a huge component of the total operating cost, will be reduced substantially.
Are you confident that telcos will be willing to pass on the business of operations of their towers to a third party?
Had we and our potential clients not convinced on this sort of arrangement, the company would have not made major success in other markets. I am also convinced that telcos are keener in focusing on their core activities rather in the business of constructing and maintaining towers. I am pleased to share with you and the readers of Pakistan & Gulf Economist that we have already acquired 700 towers in Pakistan, Out these a reasonably large number of out of towers have been constructed by our company in FATA (federally administered tribal areas), which is a grossly un-served areas. We have almost finalized a deal with Jazz to procure their 13,000 towers, which are available for sharing with other telcos.
Has your company completed all the regulatory requirement of Pakistan?
We await formal approvals from different regulatory authorities that include: Competition Commission of Pakistan (CCP) and Pakistan Telecom Authority (PTA). We have already received the approval from the CCP and we await the approval from PTA, it is normal procedure, which requires some time. The positive point is that we are moving according to our plans, and don’t suffer from any hiccups.
Who are your joint venture partners in Pakistan?
In August, edotco, a subsidiary of Axiata Group and its Pakistani partner Dawood Hercules Corp announced a deal to acquire Deodar, the tower unit of Pakistan Mobile Communications Ltd, known by its brand name Jazz, with an investment of US$940 million. The edotco Group and Dawood Group have 55:45 stakes in the joint venture.
There are total 40,000 towers installed in Pakistan and tower sharing is likely to become a norm in Pakistan. The customers per tower in US stands at 2.2, while in Pakistan it hovers in the range of 1.2 to 1.3 that indicates the huge potential of the market that can be exploited with mutual consent. The market potential is evident from the fact that telcos have invested US$2 billion for procuring licenses of 3G/4G technologies to improve quality of services. We can help them in optimizing profit through cost saving.
Will some of the towers not become redundant after sharing becomes a norm?
I am an optimistic person and strongly believe that we will be able to move the surplus towers to lesser served area, which will help the telcos in extending their outreach as well as enhance their revenue. I am also sure that hundreds of new job opportunities will be created in the country that will help in further boosting per capita income of Pakistan
Where would you position your company over the next five years?
Keeping in view the population of the country penetration of cellar technology and growing demand for data transfer, I am sure edotco will become a significant player, both in terms of revenues and customers served. I am also sure that extending outreach of telcos will also enable them to offer innovative services that will improve the quality of life of Pakistanis.
Suresh Sidhu has been Chief Executive Officer of edotco Group since July 2014. edotco operates and manages a regional portfolio of over 26,000 towers across core markets of Malaysia, Myanmar, Bangladesh, Cambodia, Sri Lanka and Pakistan with 18,461 towers directly operated by edotco and a further 8,100 towers managed through a range of services provided.
At edotco, Suresh and his team have overseen the transformation that has produced one of the fastest growing tower companies in the world in terms of towers and tenancies, with growth from new build as well as M & A. Today, it is the 8th largest independent tower company globally.
Prior to joining edotco, Suresh was the Chief Corporate & Operations Officer (CCOO) of Celcom Axiata Berhad. Suresh has also previously held senior roles at head office and Dialog in the Axiata Group. In addition, his previous work experience includes roles with Maxis, the Boston Consulting Group and Sime Darby Berhad.
Suresh holds an undergraduate degree in Natural Sciences from Cambridge University and an MBA from INSEAD.