Finance, Funding, and Legislative Frameworks for Axiata Group Analysis

This report presents a comprehensive analysis of Axiata Group's financial landscape, focusing on finance, funding, and relevant legislative frameworks. It begins with a SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats within the telecommunications industry, particularly in Malaysia. The report then examines Axiata Group's strategic initiatives over the years, highlighting key acquisitions, divestitures, and partnerships. Furthermore, it identifies Axiata's main competitors, Maxis Berhard and Digi Telecommunication, providing a comparison based on market share and revenue. The report also outlines the Key Performance Indicators (KPIs) used by Axiata to measure financial performance, including Revenue Growth, EBITDA Growth, ROIC, and ROCE. By analyzing these elements, the report offers insights into Axiata Group's market position, financial strategies, and competitive environment, supported by references to relevant sources and industry data.

Running head: FINANCE, FUNDING AND LEGISLATIVE FRAMEWORKS
Finance, Funding and Legislative Frameworks for Success
Name of the Student
Name of the University
Author’s Note

1FINANCE, FUNDING AND LEGISLATIVE FRAMEWORKS
Table of Contents
Answer to [a]...................................................................................................................................2
Answer to [b]...................................................................................................................................3
Answer to [c]...................................................................................................................................3
References........................................................................................................................................6

2FINANCE, FUNDING AND LEGISLATIVE FRAMEWORKS
Answer to [a]
SWOT Analysis
The SWOT analysis of Axiata Group is shown below:
Strengths Weaknesses
 Large size of the company along with
strong employee base (axiata.com
2017)
 Presence of diversification in different
segments
 Strong Research and Development
department
 Strong goodwill and market reputation
(khmertimeskh.com 2017)
 Low market share in recent years is a
area of concern (thestar.com.my 2017)
 Low margin of profits in many
segments in a weakness
Opportunities Threats
 Increase in market penetration in
internet usage (mcmc.gov.my 2017)
 Strong growth in population along with
urbanization
 Strong growth in telecommunication
service industry (fiercetelecom.com
2017)
 Advantage of IPO offering in other
countries
 Rapid change in technology is a major
threat.
 High competition in market
(theborneopost.com 2017)
 Aggressive advertisement
 Presence of Smartphone war
Market Growth Potential

3FINANCE, FUNDING AND LEGISLATIVE FRAMEWORKS
As per the above SWOT analysis, strong growth in telecommunication industry and
increase in population in Malaysia have been creating growth opportunities for Axiata Group.
Axiata Group is covering almost 95% of Malaysian population with their 2G and 3G network.
For developing 3500 4G LTE sites, Axiata Group is continue investing in network coverage to
boost their growth. In addition, Axiata Group has been investing in niche segments that have
string growth potential. For this reason, Axiata Group has adopted the policy of investing in
MVNOs in order to tap the niche telecommunication market of Malaysia. Thus, the company has
made several partnerships with many other companies in the same industry (axiata.com 2017).
Answer to [b]
Strategic Initiative
Over the years, Axiata Group has been taking major strategic initiatives as per the
changing business environments. In 2012, Axiata Group adopted the strategy of divesting 91%
of their company shares in XL to offer investments to institutional investors. As per their
strategic initiative, Axiata Group appointed CFO of Edotco group James Maclaurin. In 2014,
Axiata Group completed the acquisition of Axis Telekom Indonesia. In 2015, Axiata Group
completed the subscription of 80% stake of Asia Pacific Pte. Ltd. In 2016, Axiata Group
completed the acquisition of Ncelll Pvt. Ltd. that is the best mobile operator of Nepal
(axiata.com 2017).
Answer to [c]
Identification of Nearest Competitors

4FINANCE, FUNDING AND LEGISLATIVE FRAMEWORKS
Two of the major and nearest competitors of Axiata are Maxis Berhard and Digi
Telecommunication.
Figure 1: Market Share
(Source: bmiresearch.com 2017)
From the above figure, it can be seen that based on earned revenue, Maxis and Digi
provides a tough competition to Axiata. In addition, all of these three companies acquire most
proportion of the telecommunication market share. Thus, these two are the nearest competitors of
Axiata.
Identification of KPIs
As per the annual report, Axiata uses four major Key performances Indicators (KPI) to
measure the company’s financial performance. They are Revenue Growth that indicates the
growth in the revenue of the company; EBITDA Growth that indicates the growth in earnings
before interest, tax, depreciation and amortization; ROIC that is derived from EBIT less tax over

5FINANCE, FUNDING AND LEGISLATIVE FRAMEWORKS
average capital invested; and ROCE that is derived from EBIT less tax over average capital
employed (axiata.com 2017).

6FINANCE, FUNDING AND LEGISLATIVE FRAMEWORKS
Competitors Analysis
As per earlier discussion, two major competitors of Axiata are Maxis and Digi. Maxis is a
major telecommunication company in Malaysia that was established in 1993. Maxis acquired
almost 41% market share of Malaysian telecommunication industry. In 2014, the company
registered 8.2 billion MYR as total revenue and 1.638 billion MYR as net income
(maxis.com.my 2017). Digi is another major telecommunication company in Malaysia that
established in 1995. Digi has acquired 30% of the market share of Malaysian telecommunication
industry. In 2015, Digi registered 6.914 billion MYR as revenue and 1.723 billion MYR as net
income (digi.com.my 2017).

7FINANCE, FUNDING AND LEGISLATIVE FRAMEWORKS
References
axiata.com. (2017). Annual Report 2016. [online] Available at:
https://www.axiata.com/media/upload/investors_relations/2016/pdf/Full_Draft_Axiata_Annual_
Report_2016.pdf [Accessed 20 Oct. 2017].
Axiata.com. (2017). AXIATA ANNUAL REPORT 2016. [online] Available at:
https://www.axiata.com/media/upload/investors_relations/axiata-2016/ar/business-review/
celcom.php [Accessed 20 Oct. 2017].
Axiata.com. (2017). Axiata Group – One of Asia’s largest telecommunications groups. [online]
Available at: https://www.axiata.com/corporate/past-milestones [Accessed 20 Oct. 2017].
axiata.com. (2017). Group Corporate Structure. [online] Available at:
https://www.axiata.com/media/upload/corporate/group_corporate_structure_59e8bb048fe1f.pdf
[Accessed 22 Oct. 2017].
BorneoPost Online | Borneo, Malaysia, Sarawak Daily News. (2017). M’sian
telecommunications industry remains highly competitive. [online] Available at:
http://www.theborneopost.com/2012/07/10/msian-telecommunications-industry-remains-highly-
competitive/ [Accessed 22 Oct. 2017].
Digi.com.my. (2017). Our Company | Digi - Let's Inspire. [online] Available at:
http://www.digi.com.my/aboutus/corporate_overview/information.html [Accessed 20 Oct. 2017].

8FINANCE, FUNDING AND LEGISLATIVE FRAMEWORKS
Fiercetelecom.com. (2017). Malaysian telecom sector sees strong growth | FierceTelecom.
[online] Available at: http://www.fiercetelecom.com/telecom/malaysian-telecom-sector-sees-
strong-growth [Accessed 22 Oct. 2017].
Khmer Times. (2017). Smart Axiata joins NIPTICT to fund students - Khmer Times. [online]
Available at: http://www.khmertimeskh.com/5084941/smart-axiata-joins-niptict-fund-students/
[Accessed 22 Oct. 2017].
Maxis. (2017). About Maxis | Maxis. [online] Available at: https://www.maxis.com.my/en/about-
maxis.html [Accessed 20 Oct. 2017].
mcmc.gov.my. (2017). INTERNET USERS SURVEY 2016. [online] Available at:
https://www.mcmc.gov.my/skmmgovmy/media/General/pdf/IUS2016.pdf [Accessed 22 Oct.
2017].
store.bmiresearch.com. (2017). Malaysia Telecommunications Report. [online] Available at:
https://store.bmiresearch.com/malaysia-telecommunications-report.html [Accessed 20 Oct.
2017].
Thestar.com.my. (2017). Axiata Group's profit sharply lower at RM657mil in FY16 - Business
News | The Star Online. [online] Available at: http://www.thestar.com.my/business/business-
news/2017/02/23/axiata-group-profit-sharply-lower-at-rm657mil-in-fy16/ [Accessed 22 Oct.
2017].