By G. Sharmila
By the time Puan Chan Cheong founded P1, he already had more than a decade’s experience as an entrepreneur and was geared up to bring WiMAX to the entire nation. However, by 2013, the company was struggling and it was time for a change of strategy. He tells KINIBIZ what he did to save the company.
________________________________________________________________________
In 2012, Packet One Networks (Malaysia) Sdn Bhd (P1) had managed to break even on the strength of its WiMAX offerings. However, things started to go downhill from there despite founder Puan Chan Cheong’s concerted efforts to bring WiMAX to more households. Before he knew it, the company was posting losses and Puan had to change strategy to keep it afloat.
However, Puan remained optimistic and determined. “Right now in hindsight, I have not regretted anything because we made all the right decisions and we gave it a very good trial. It’s just that the macro (environment), the technology did not make it… What we have learned is that you have to adapt to change – this is something that is beyond your control. We did our best, we got the licence, we were the first one to launch (WiMAX). We managed to accelerate broadband adoption; at that time Malaysian broadband adoption was only 30% of the household and right now we are at 65% of households,” he said.
“I think we brought tremendous stimulus into the market and we said we were not going to condemn the things that we could not control as long as we tried to do the best, and by all standards we had done well. We were the first one to launch the service – the market was so excited, the subscribers were all flocking in and of course the lesson we learned is that we couldn’t grow ahead when the network was not ready and when the technology did not make it, we had to adapt to change,” he added.
Puan made the decision that P1 had to upgrade to the long-term evolution (LTE) standard. However, the investments needed for that technology were more than the company could afford on its own.
“It was a huge upfront investment, we also required more resources… So I decided P1 was to have the right partner and institution to support us, to bring us to the next level,” he explained.
In March 2014, Telekom Malaysia Bhd (TM) said it was buying a 57% stake in P1 for RM350 million, a deal which was later approved in October the same year. TM as a result is now the new parent company for P1 with a shareholding of 55.3%. Green Packet has a 31.1% stake and South Korea’s SK Telecom Co Ltd (SKT) has 13.6%.
“So we signed a deal in March 2014 whereby all three parties have committed to invest RM2 billion and we are not only investing the money, but we have also put in combined technical assets… TM’s abundant fibre backhaul, our spectrum assets. TM has got 850 megahertz that is best for coverage, and our 2.3 gigahertz (Ghz), 2.6Ghz the best for capacity… a marriage of the best spectrums. And we also have LTE expertise by SKT, the most advanced LTE service provider in this part of the world and the original, very entrepreneurial spirit and culture that we inherited from Green Packet,” Puan said.
He added that he believes that they have got the right team, the right financial power, the right technical power and also the wide market power.
Puan Chan Cheong
“Remember if we combine P1 and TM, we have more than 60% of the Malaysian households being our broadband customers; we have enough pace to really upsell and offer the value to our existing customers. That means when we go into the market, it’s not only competing with all the mobile players – we don’t see ourselves competing with them – but we are looking at ourselves supporting the group vision to be the convergent champion. We don’t need to compete with others but just by selling to our existing base, we believe that we can bring a lot of value to our customers,” Puan said.
In hindsight with P1, if he had the chance to do something differently, would he?
“If you meant if we would have invested and started P1, definitely I would say yes. In hindsight the key thing that I also share is we really have to put customers first and we should never disappoint or fail customer expectations. We were the victim of our success… Our marketing was a tremendous success, but as I said what we delivered did not meet customer expectations. So put customers first and don’t fail them. That’s one thing that I think I would do differently. That’s what we really strive to do (now),” he said.
However, Puan shied away from saying when exactly the TM-P1 collaboration will launch their LTE offerings. “We are taking our time to prepare, upgrade our network to make sure things are really in place,” he said.
What value add has TM brought to the table? Puan explained that the two are combining technical assets, that TM is providing financial support and that the entry of TM has helped them strengthen the leadership team and governance, as well as the know-how.
“And most importantly the market power, the customer base to enable us to upsell and cross-sell, to deliver a seamless experience,” he added.
If he had something to say to his 24-year-old self, what would he say?
“I would say just be grateful. I’ve lived a very colourful and exciting journey – all I can say I am only grateful. Even though I faced big challenges, right now we are given the opportunity again to have one more chance to realise our aspirations of how to keep people best connected and enrich their lives. And we believe that with this partnership and support from TM we are very confident that we will be able to make our aspirations come through,” Puan said.
When asked if he has any advice for aspiring entrepreneurs, Puan said he would encourage them to pursue their passion and dream.
“While continuing to push on, don’t ever give up. Have the perseverance, it’s not going to be smooth sailing. It is a given that they (new entrepreneurs) are going to face so many challenges, because right now… while I was in Silicon Valley the business success rate was 10%… the business success rate is even lesser now due to the dynamic, frequent change and adaption of technology – the chances for the company to make it is probably half than what it used to be, less than 5%. They should take it as a journey no matter what challenges they are facing, and what doesn’t kill them will make them stronger,” Puan said.
Yesterday: From Silicon Valley to Malaysia
You must be logged in to post a comment.