Mar 19, 2021

Ooredoo plans to take on Telkomsel with Hutchison merger

Telecommunications
Merger
Technology
Sam Steers
1 min
Courtesy of Blue Planet Studio on Getty Images
The Qatari and Hong Kong-based companies have Telkomsel in their sights as they aim to become Indonesia's No.2 carrier...

In December 2020, Qatari-based telecommunications company Ooredoo announced that it was exploring the possibility of merging with CK Hutchison Holdings, a telecommunications company in Hong Kong, in an attempt to become Indonesia’s second-largest carrier.

As it stands Ooredoo is the sixth-fastest growing telecoms company in the world and its merger with Hutchison would put pressure on rival, Telkomsel, which is currently the dominating company in the Indonesian telecommunications market.

However, it has recently been revealed that the merger between the two companies reportedly aims to take a market share as large as 30%, putting both organisations in sight of market dominance. 

Ooredoo’s Managing Director, Aziz Aluthman Fakhroo says that “the combination with Hutch will put us as a clear number two, taking us to 27%-30% revenue market share in Indonesia.”

By comparison, Indosat’s market share was around 17%.

The effects of the merger on enabling new joint businesses to battle Telkomsel are yet to be seen, and with an extensive fibre network will prepare Telkomsel for the introduction of 5G in Indonesia, meaning new businesses may struggle to compete. 

However, before entering the market the merger will need to be approved, something which Ooredoo Managing Director, Fakhroo, hopes will happen by the end of the year. 

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Apr 29, 2021

Indigo: overcoming the challenges of fibre rollouts

FibreOptic
connectivity
mobileoperators
broadband
Ray O’Connor
4 min
Ray O’Connor, Chief Revenue Officer at Indigo, cautions against allowing fibre hype from obscuring the challenges that MNOs still face
Ray O’Connor, Chief Revenue Officer at Indigo, cautions against allowing fibre hype from obscuring the challenges that MNOs still face...

Investment houses are actively demonstrating their confidence in fibre. Governments are committing to urban and rural rollouts as part of the EU’s European Gigabit Society objectives on connectivity. You could be forgiven for the thinking that we are in the middle of a simple transition to super-fast networks with capacity to spare.

But it is not always that easy. The integral value of ubiquitous ‘full fibre’ access has had some very positive socioeconomic benefits across a great number of countries since COVID broke and lockdowns began, not only for those working remotely but for those living in and enjoying rural life and being able to remain living there because they are now having connectivity.

The direct appeal to investors is obvious – fibre is expensive to deploy but once in the ground the value quickly rises. Essentially it’s glass, which means it costs less to maintain than copper, ticks increasingly important ESG (Environmental, Social, and Governance) criteria, and promises a huge payback over an extended period of time. You could even call it future proof. Full fibre access as a strategic infrastructure investment and utility is forming and even strengthening public policy across Europe.

But there are a couple of challenges that need to be factored in. Investors and independent alternative network (AltNet) operators need to be aware of two things:

1. A skills deficit when it comes to deploying fibre.

2. Its nuanced relationship with 5G, another network technology that’s getting people very excited.

Growing a talent pipeline

Appointing people with the expertise to design and build fibre networks can be more difficult than you might think. AltNet operators might be shocked to discover that higher education institutions are behind the curve, that the engineering talent pipeline is not there. Unlike other engineering disciplines, such as structural, mechanical or electrical, you can’t actually complete a degree course in fibre engineering in the UK or Ireland – which is surprising when you consider the amount of investment it’s attracting.

We recognised that the lack of fibre design and build courses created a need that we had to address. When it became clear that the talent pool was near empty, we set about creating our own. In the last three years, we have put enormous resources into the development of in-house training. We expected and planned for a busy time as fibre rollout began and we were pleasantly surprised at how much work and how quickly it would come out.

Wireless and fibre considerations

The next iteration of mobile networks presents more than a skills challenge and AltNet operators need to understand the role 5G will play in meeting the bandwidth needs of consumers and businesses. The first thing to be clear about is that wireless and fibre are not in competition, they are complementary.

We design networks for both wireless/5G and fibre and take the fact they complement each other for granted. But for the wider world it seems that an education job still needs to be done.

Where one wins over the other as the primary means of access should always depend on the business case and backhaul considerations. Finance houses and AltNet providers need to make themselves familiar with both technologies or risk a rollout based on a bad business case. You have to weigh up performance versus cost and capacity requirements and the part that design and engineering play in the network build. Investors are clambering across each other to obtain fibre assets across Europe. Most are infrastructure and pension funds given the non- precarious nature of these investments and their proven ROI.

There are pros and cons for each: customers get a level of comfort from fibre in a way that they don’t with wireless because it’s a tangible piece of technology that offers more network throughput. The downside is that it might also involve invasive digging and reinstatement works as well as complicated planning and council permissions. All of this ramps up the cost.

The long-term value of putting fibre in the ground might be lost if a mobile operator reaches the same rural destination with 5G for a fraction of the investment. Wireless technologies can be deployed much faster and next-generation mobile networks will be able to carry much larger data packets than they did in the past. So if the challenge is to deliver broadband to a rural village, a 5G or microwave deployment is likely to be easier and more cost-effective than fibre to the home.

AltNet companies building businesses around fibre need to be aware that achieving a return on investment involves more that securing a contract with a local authority. Skills shortage and the role of 5G have to be factored into the plans. Then there is the challenge of turning a fibre network design into a well-executed build that comes in on budget. But that’s another story…

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