For over a decade, Norway’s Telenor has remained a quiet investor in DiGi.Com Bhd. But recently it embarked on an ad blitz to enhance its profile as an investor. StarBiz caught up with Telenor Group executive vice-president and head of Asian region and chairman of DiGi.Com, Sigve Brekke, who was in town last week to welcome Norway’s Crown Prince Haakon Magnus and Crown Princess Mette-Marit to Malaysia and DiGi. Below are excerpts of the interview with Brekke.
Telenor is in five countries in Asia; are there plans to buy more stake in telcos in this region?
Sigve Brekke: The answer is yes and no. When we did the acquisition in India it was a big challenge given the size of India. Our aim is to focus on the five (countries) and succeed in India. We do not have the capacity to do more acquisitions. But yes, we are looking for opportunities in the foreseeable future, but no plans for mergers and acquisitions now.
The dividends from DiGi are used by Telenor to invest in India?
If you are saying that we are stripping other countries for our investment in India, the answer is No.
Telenor has been investing in LTE (long term evolution) technology for the future, is that also the game plan for DiGi?
It is still early days and it really depends on market development. When 3G has been fully developed and when the market demands it, we will look into that.
Please share the volume of iPhones committed by Apple Inc to DiGi and will DiGi be able to sell them all and to whom?
It is a certain number that we have committed ourselves to and if (we are) not (able to sell them) we would not have committed (ourselves to the quantity). We would look at the profile of our existing users that want to migrate and take the competition’s users.
What do you see as challenges for the celco industry globally?
In mature markets like Malaysia, the challenge is to be able to micro segment the market into smaller groups and offer new services to customers. For growth markets, the challenge is to lower cost.
How does DiGi fare among Telenor’s Asian investments?
DTAC is the major contributor for our Asian operations, followed by Grameenphone and then DiGi. Telenor expects India to be major contributor towards revenue in the longer term. We are happy with our investment in DiGi and its share price has been the best performing within the Telenor Group.
Singapore Technologies Telemedia – the parent of StarHub – is set to ink a strategic partnership agreement with U Mobile Sdn Bhd today (Monday), should DiGi be worried about a new competitor potentially throwing a lot of money into the market to gain market share?
We don’t generally worry about competition. In India, we entered the market where we were the 10th player and today, we are in a better spot. Competition just encourages us to work harder. It is also harder for a newcomer to come and challenge established players as the latter has the economies of scale and brand advantage.
The three established players in Malaysia are all offering good services but they (STT) are more than welcome but we don’t think it would be easy. It has been proven that over time, the market can normally sustain only three players as this is a capital intensive business.