The nordic telco eyes Southeast Asia expansion and maybe an IPO
Norwegian telco Telenor Group announced Tuesday the formation of Telenor Asia. Telenor described the new business group as “a more independent regional entity” based in Singapore, created to oversee the company’s efforts to expand its market in Bangladesh, Malaysia, Pakistan and Thailand
Telenor already holds a commanding presence in its Asian markets. Asia accounted for almost half of the company’s revenue in 2021, where it provides services to more than 162 million subscribers.
“The strengthened team at our Singapore headquarters will add value to our operations and safeguard our interests in the region. This will also help us ensure value creation of our assets, and we will explore structural partnerships or, in the future, a potential IPO,” said Jørgen Rostrup, head of Telenor Asia.
The restructuring provides dedicated investment management teams for each market, the company said.
“These teams will take on an asset manager role and represent Telenor’s interests in local boards. The team in Singapore will also be strengthened with expertise in finance, operations, risk management, governance, people management and responsible business,” said Telenor in a statement.
Telenor signed merger agreements in Malaysia and Thailand in 2021. Once completed, the company says these will be the largest and second-largest mergers in Southeast Asia, representing more than 200 million customers and US$10 billion in annual revenue.
The company said its Asia strategy moving forward will be to increase mobile adoption and data usage in Bangladesh and Pakistan, two emerging markets the company sees as drastically underserved. “There are more than 150 million people in these two countries without mobile devices and 50[%] of the current customer base subscribe to voice services only,” said Telenor.
Other efforts include expanding services beyond core mobile connectivity to areas like gaming, security and insurance. It also wants to grow regional B2B revenue, currently pegged at around 5%. “Throughout the pandemic, when the overall telco sector was contracting, Telenor Asia’s B2B revenue was up by 10[%],” said the company.
Last week, Telenor announced that it had created a new subsidiary, Telenor Fiber AS. The new business unit will own Telenor’s passive fiber assets in Norway. Telenor Fiber AS will manage about 130,000 kilometers (ca. 80,778 miles) of cables connecting more than half a million subscribers, the company said. What’s more, Telenor will divest 30% of the newly established company to U.S. investment firm KKR and Norwegian pension firm Oslo Pensjonsforsikring. The sale will generate NOK 10.8 billion (US$10 million) in proceeds, and about a third of the proceeds are slated for share buybacks.
The company’s 5G transformation efforts with hyperscale partners continues apace. In January, Telenor announced a strategic collaboration with Amazon Web Services to expand its 5G core transformation. Telenor said that it and AWS will invest in joint go-to-market activities in select industries like manufacturing, supply chain and logistics, and automotive, to enable more 5G and edge services for customers. That news came weeks after it announced a strategic digitalization partnership with Google Cloud that ranged from network function virtualization efforts to new 5G revenue opportunities. The businesses will use the new platform to offer new emerging 5G products and services, like edge computing and IoT, according to a joint statement.
