Team #shazbaz set to change TM
New management duo want faster pace, more innovation
THEY call themselves the #shazbaz team and are set to change the way Telekom Malaysia Bhd (TM) moves and reacts to its customers.
Datuk Seri Mohammed Shazalli Ramly and Datuk Bazlan Osman want to move things at a faster pace, rely on analytics and big data to push innovation to earn more and also groom talents.
Shazalli is the newly-appointed managing director/group CEO who came on board on May 1, while Bazlan, the TM’s former group chief financial officer was promoted executive director/deputy group CEO on the same day.
“We are talking about the expansion of TM, speeding things up, inspiring people so that we are ready to hit the ground and run,’’ Shazalli says.
He says he brings zest to the organisation to take it to the next level, but the priority remains – to monetise the assets via a converged way. Globally, telecom players are finding new ways to innovate to keep and grow market share or risk losing potential new revenue streams by not sweating their assets.
Players can also not rely on technology-driven innovations but need to understand consumer psyche to bring to market what is in demand rather than what they think will sell.
“Analytical consumer behaviour and innovation is something that is vastly needed in all GLCs,’’ Shazalli tells StarBizWeek.
Being a branding-marketing man with vast experience, he has a plan in place although he is not going to make changes to the existing business plan. But he has since realigned the organisational chart to ensure the right man fits the right job so as to ensure execution at a speedier pace.
“His role would be to speed up execution and delivery of results from TM’s convergence strategy. He will leverage on his decade of experience in broadcasting (Astro, NTV7) and the past seven years in the mobile business (Celcom). With his strength in marketing, he wants to increase TM’s share of ‘customer moments’, says CIMB Equities Research in a report.
By moments, Shazalli wants to increase the time consumers spend on TM-enabled solutions. But he is not alone in this game of moments, there is a gradual shift to monetise on experience and that battle field will soon get intense. He believes TM has the first mover advantage to get a bigger slice of the customer’s wallet with moments.
He hopes to bring new services and products in the second half of the year.
Would it then mean higher pricing for consumers?
“I think that is not the approach we will be taking. To innovate behaviour, there is no price point, it only happens when players compete on the same product.
“But when you offer products that no one else has, there is no price point (issue), unless, of course if someone copies,’’ he says.
One of the early innovations would be cloud-based services.
He is also looking to expand market reach, the youth segment being an market which he is keen to tap.
Analysts say TM will launch new Webe products targeted at SMEs, prepaid plans for the mass market and Webe services for enterprise and government customers and it has plans to introduce pre-paid services later this year.
To move TM ahead, the #shazbaz team have their roles cut out for them.
Marketing, branding and even regulatory matters come under the purview of Shazalli, while the delivery of revenue and cost, among other things, fall on Bazlan.
Pricing factor
But he has other challenges to contend with. This week TM reported a 3.8% rise in revenue for the first quarter ended March 31, 2017 to RM2.96bil from RM2.85bil a year ago, driven by revenues from Internet, voice and data services.
But on a pre-tax basis, its profit fell 28.5% to RM230mil from RM322bil due to higher operating cost and lower foreign-exchange gain.
But net profit was up to RM229mil from RM203mil, and ebtida (earnings before interest, tax, interest and amortisation) rose mar- ginally to RM949mil from RM923mil.
Earnings per share were lower at 6.13 a share from 8.58 a share a year ago. Analysts see that as a “good start’’ ahead. For full year most houses are maintaining their targets though the pressure will come from Webe and the possibility of the government pushing TM to implement the price cuts for broadband services as announced in Budget 2017.
Maybank Investment Bank says TM’s nearterm earnings growth outlook remains subdued with Webe (TM’s mobility solution) possibly remaining EBITDA-negative in 2017-18.
Hong Leong Investment Bank says UniFi added 30,000 subscribers in the first quarter of 2017, pushing the total base to 979,000.
Average revenue per user (arpu) is at RM201 as 81% of the base is on packages of 10Mbps and above after the launch of all new UniFi Advance packages. This is also attributable to higher purchase of premium IPTV content.
The house added that “due to its monopoly status in Malaysian fixed telco sector, regulatory risk is higher while government funding further lowers its bargaining power.
“Convergence is a visionary ambition but Webe will be a drag in the medium term.
“Dividend policy of at least RM700mil payout caps the downside.’’
So, the upside for TM is if Webe turns profitable earlier while the downside risk will see a 50% headline broadband price cut.
AmInvestment Research expects Webe to only break even by next year.
Alliance Research believes TM will report RM12.5bil in revenue, and RM862mil in net profit for full year 2017, with EPS of 22.9 sen and ebidta of RM3.9bil.
Most investors will have their eyes on the #shazbaz team to see how they can push a huge organisation like TM forward.
Is the team behind him? Although he is not a newcomer to TM, it is a sort of “home coming” for him.
“I feel very at home as I am among friends and I am up to the challenge (to steer TM ahead),’’ he adds.
Since joining TM, Shazalli has done several “townhalls’’ with the team that comprises 28,000 staff.
The message internally is quite clear, as he puts it, “speedier execution, stay healthy (individual and company) and be safe.’’