PARTNER CONTENT: With more than two years passed since Indosat Ooredoo Hutchison (IOH) formed following a $6 billion merger, President Director and CEO Vikram Sinha outlined his bold approach to adopting AI, a vision to revolutionise the company internally and a goal to ensure the technology benefits millions of Indonesians.
For Sinha, “the numbers speak for themselves”. He reflected on CK Hutchison’s merger with Ooredoo, completed in 2022, and said it was very clear the tie-up has been a success, both from a financial point of view and for customers in the country.
Speaking during a media briefing at TM Forum’s Digital Transformation World in Copenhagen, the executive first pointed to a recent report from research company Opensignal, which found the combined network has in particular benefitted rural citizens, with close to 10 million new customers.
Regarding wider performance and future ambitions, he said the industry could grow CAGR to 8-10 per cent from the current 5 per cent, while pointing to shareholder returns of 56 per cent in 2023.
For IOH specifically, Sinha has set a “bold, ambitious target” of increasing EBITDA from a current baseline of $1.5 billion to $3 billion by 2028.
The company will do this, argues Sinha, by tapping into a new market opportunity, increasing IOH’s total addressable market of $18 billion to around $30 billion, while targeting an ARPU increase from the current level of less than $3 to $4-$5, ultimately by increasing the value of its connectivity.
Centre to this growth will be the adoption of an AI-native approach.
AI-native approach
Opening up on IOH’s inside story on AI, Sinha first reflects on one of the past technology revolutions that has shaped the world we live in today.
He points to Apple’s App Store, launched in 2007 with just under 500 apps, Four years later, Google followed, with around 18,000 apps available.
Coming to a time when OpenAI’s ChatGPT has taken the world by storm, there are now more than 3 million apps available. “This indicates what is going to happen in the next few years, as innovation and democratisation is at a different scale.”
Sinha explains IOH’s purpose to adopting AI is very clear. “We want to do AI because we believe this is linked to our larger purpose of empowering every Indonesian,” he said.
The company has built its AI vision on three pillars. The first is pursuing a strategy of becoming an AI-native telco, essentially embedding the technology into its core business, starting with personalisation around customer offers in the B2C space, managing capex and increasing productivity. This piece then extends to procurement, HR, sales and marketing.
The second pillar is an AI-native techco approach, focusing on establishing a sovereign cloud, implementing security measures, tapping into the vertical sectors of banking and energy and exploring data monetisation opportunities.
Finally, Sinha emphasises he wants to use AI to propel the whole of Indonesia – the AI Nation Shaper.
On the third pillar, he points to the company’s AI Centre of Excellence, where it puts a “disproportionate focus on human capital development” and how it works with an ecosystem of partners to ensure the technology is an enabler for citizens.
“We will not be successful if we are not equally investing in people.”
AI aside, Sinha also touches on the advancement of Indonesia through Fibre To The Home (FTTH), pointing out that only 15 per cent of homes in the country are currently connected. In the next three or four years, he wants that to increase to around 35 per cent, through a mix of Fixed Wireless Access (FWA) and FTTH.
Partners and purpose
Sinha concedes it took IOH around one year to establish an AI framework, and it did not do it alone.
A partnership with Google Cloud helped the company make sure it was able to create a unified data platform and deliver AI-driven digital experiences across Indonesia.
The company has also partnered with AI trailblazer Nvidia to create a sovereign AI infrastructure, and through its AI Centre of Excellence it is working on the Sahabat AI model with Tech Mahindra, the first LLM in Bahasa Indonesia.
With these examples, Sinha explains that “it is all about execution” in making a plan come to life. “It is not about having these brilliant ideas. First, your direction has to be correct. In the industry, everyone is so excited about AI and they are chasing the use cases. My learning is this is not the way to do it, first you have to get the horizontal platform right.”
Sinha continued to state that if the basic steps are not right, there will not be an opportunity to scale.
By having a unified data platform, he believes there is a strong foundation to control costs, give it the ability to scale, increase vertical expertise and essentially measure the impact of AI on its business.
“Internally, when I become an AI-native telco, I want to know how I use GenAI to ensure my ARPU is going up, how am I doing personalisation and how am I going to manage capex in a more productive manner?”
Coming to some actual examples and benefits the company is experiencing in adopting the technology, Sinha said one of the first successes has been around capacity planning.
He said IOH has used the platform internally, and with AI, capacity planning accuracy increased from around 80 per cent to close to 98 per cent, generating millions of dollars in savings.
The second use case Sinha highlighted lies in home broadband. The executive said the company has built an AI-powered module on its platform that is able to take socio-economic data and provide insight into areas in the country services had been taken up.
On the techco side, he also had two examples. Building on its partnership with Nvidia, Sinha said banks are approaching the operator to help them build a sovereign cloud and sovereign infrastructure, and they are not only interested in connectivity.
“They are exploring how we can help with help money laundering problems and solving KYC issues. This is very new to us. And this is where we are building whole capabilities with our partners so we can address that.”
A second area Sinha has seen an impact is in agriculture. He said farmers in the country are using AI in rural areas to help them increase the yield of their crops.
This further adds to the company’s work with the ITU and the Ministry of ICT in Indonesia to bridge the digital divide in the country, with a target of providing 1 million citizens to new skills.
“The democratisation of innovation is happening at a rapid pace,” concluded Sinha.
Partners on principle
Sinha is adamant that the progression of technology and AI will only be possible if he sticks to his philosophy and purpose, largely built on collaboration.
He reveals the company counts 960 vendors across the ecosystem. 66 of them have been classified as partners and out of 66, 22 are considered strategic partners.
The first step to ensure success is to align cultures within organisations, and then it relies on creating an operating model for partners to work together and write the design principle.
Learning from companies like Nvidia and Google has been “incredible”, said Sinha, but added that there are often difficulties, particularly in developing a sovereign cloud for example as there are conflicting messages.
He adds that it is often challenging to work with the technology big boys, and it is important that case-by-case, there is alignment. “We want to make money with our partners, not from our partners”.
In reflecting on the past, Sinha concludes by stating that telcos were very inward looking in complaining about OTTs and regulators, “but the reality was, we were more self-inflicted”.
“We were not building trust with our customers. We were not open. Covid-19 was a pivot moment, and AI is a much bigger pivot moment.”