Axiata Group secured a deal to sell off its majority share in its Nepalese operation Ncell, effectively ending the group’s business in Nepal after seven years due to a tax dispute. 

In a statement, Axiata said it entered an unconditional sale and purchase agreement with Spectrlite UK, for its holding company Reynolds which holds around 80% stake in Ncell and a mobile licence running until 2029.

Axiata chairman Tan Sri Shahril Ridza Ridzuan said: « The increasing challenges in the operating environment represents a fundamental shift. It has led the Axiata board to conclude, after a thorough process, that our foray in Nepal cannot continue due to the unfavourable conditions for Axiata. »

The operator entered Nepal in 2016 after acquiring Reynolds for US$1.3 billion and securing the 80% stake in Ncell it is now selling. 

The reason for Axiata’s exit stems from a highly disputed capital gains tax bill from the Nepalese government. 

Axiata noted it paid NPR47 billion (US$421.9 million) in capital gains tax to the Large Taxpayers Office of Nepal (LTPO) in April 2020 for the acquisition of Reynolds, and stated it received confirmation from the tax office that there will be no further taxes.

But the LTPO demanded NPR57.9 billion (US$433.6 million) extra for the transaction after further assessment in January 2021. 

The money has not been collected by the LTPO as Axiata took the matter to the Supreme Court of Nepal which issued an interim order. The company noted: “Capital gains tax was imposed on Ncell and Axiata after Nepal’s efforts to collect tax from the seller failed.”

Axiata filed the matter to the International Centre for the Settlement of Investment Disputes, which found in June this year that Nepal should cease its demand for further taxation for the 2016 acquisition.

Despite this, the Nepalese government has yet to withdraw its demand for the extra payment.

Axiata argued if it paid the extra tax, it would take the overall capital gains tax bill to USD855.5 million, or 62.7% of the transaction of Reynolds (US$1.3 billion) to enter the market.

Axiata blasted conditions in Nepal, highlighting double taxation, expiry of its licence in 2029, potential expropriation of Axiata’s stake by the government and unfavourable foreign investment protection. 

The company claimed to be the largest tax payer in Nepal, contributing NPR283.0 billion in taxes and fees as of its fiscal 2021/2022 since inception. It has over 17 million subscribers across its network. 

Vivek Sood, Group Chief Executive Officer and Managing Director of Axiata added the sale enables a “clean exit” from Nepal. 

The company revealed intentions to leave Nepal in its financial results this week.

A bit of data center M&A, a new secure device option, an FTTH upgrade, and a new data center campus: … [visit site to read more]

In the weeks running up to AfricaCom 2023 (part of the Africa Tech Festival, the largest digital infrastructure event in Africa – takes place November 14 to 16 in Cape Town), there is a lot of preparation work to do on site, so I have been watching a fair amount of South African television recently. And this has really opened my eyes to the prevalence of the use of SMS text messaging by South African organisations of all shapes, types, and sizes to both communicate with existing clients and help reel in the new. It’s very simple: viewers see … [visit site to read more]

Amazon Web Services (AWS) said on Thursday that Malaysia’s Axiata Group has selected AWS as its primary cloud provider as part of its plan to accelerate digital transformation across its operating companies in Southeast Asia and South Asia.

AWS said Axiata will migrate a wide range of mission-critical applications to AWS by the end of 2024, including more than 650 services across customer service, enterprise resource planning, and human resources, and 80 machine learning (ML) applications.

Axiata will also make use of AWS technologies such as data analytics, ML and generative AI to inform data-driven business decisions, tailor offerings to new markets, and develop new services to meet evolving customer needs across the telecoms, banking, and payments industries, said Axiata group CIO Anthony Rodrigo.

“Customers expect effortless mobile transactions, and by tapping into AWS’s generative AI and machine learning capabilities, we can deliver on the needs of customers rapidly, securely, and more cost effectively,” he said in a statement. “The cloud gives us the agility to build new business models that will differentiate Axiata now and into the future.”

AWS noted that Axiata is already using some of its services and tools. For example, Axiata has been leveraging Amazon Bedrock – which makes multiple foundation models available via an API – to build experimental generative AI applications to improve productivity across all business lines, including customer service, finance, human resources, and sales.

Sri Lankan telco Dialog Axiata has been using Amazon SageMaker to transform its analytics and ML infrastructure into an internal AI factory system that enables the company to use analytics and ML to develop and deploy churn prediction and next best-offer systems to drive customer engagement.

Meanwhile, Indonesian telco XL Axiata is using Amazon Elastic Kubernetes Service (Amazon EKS) to launch and run its MyXL and AXISnet mobile applications without needing to manage underlying infrastructure. Result: XL Axiata has expanded the availability of its services, tripled its monthly active users in two years, and scaled its applications nearly twice as fast compared to using on-premises infrastructure, AWS said.

“With AWS, Axiata can diversify and modernize their business in the cloud, while shaping the future of customer service with generative AI,” said Conor McNamara, vice president at AWS ASEAN.

Indonesian telecoms infrastructure Dayamitra Telekomunikasi (Mitratel) said it has added more towers and optical fibre to its portfolio via separate acquisition deals worth a combined US$167.3 million.

Mitratel, a subsidiary of Telkom Indonesia, said on Thursday it had acquired 803 towers belonging to Gametraco Tunggal worth IDR 1.75 trillion (US$112.6 million). Of those, 241 towers are located on the island of Java, while the remainder are outside of the island.

Mitratel President Director Theodorus Ardi Hartoko said that many telecoms players in Indonesia are looking to expand their market share outside of Java as demand for internet connectivity grows elsewhere in the archipelago.

“Of course we have to be at the forefront in helping their expansion,” he said.

Apart from giving Mitratel more towers outside of Java, the Gametraco deal also comes with an additional 1,327 new tenants, which will increase Mitratel’s tenancy ratio, Hartoko added.

Meanwhile, also on Thursday, Mitratel revealed it had acquired 967.1 km of optical fibre from Power Telecom for IDR 85 billion.

Mitratel said the fibre has a billable length of over 1,144 km, which means the new fibre complements its tower business portfolio with a billable ratio of 1.18x.

Mitratel said the transaction was sourced from internal funds, noting that it had budgeted a capex of IDR 7 trillion for 2023, 58% of which had been absorbed by the end of the third quarter of 2023.

“This means that Mitratel has sufficient liquidity to finance tower and fibre optic expansion until the end of this year,” the company said in a statement.

Earlier this month, Mitratel reported profit growth of 16.6% year-on-year to IDR14 trillion in Q3 2023, while revenue increased 11.9% to IDR6.3 trillion. In that quarter, Mitratel’s tower portfolio grew 5.8% year on year to 37,091 towers, while its optical fibre assets grew from 5,872 km to 29,042 km.

Hartoko said Mitratel’s expansion strategy will make it the largest digital infrastructure company in Asia Pacific.

Research firm Dgtl Infra said in September that Mitratel was the 13th biggest telecoms tower company in the world based on the number of towers. As of June 2023, Statista ranked Mitratel at #15 globally, but also said it was the largest tower company in Southeast Asia.

Tata Advanced Systems Limited (TASL), India’s leading private sector player for aerospace and defence solutions, and Satellogic, a major name in sub-meter resolution earth observation (EO) data collection, have announced a collaboration for establishing and developing local space technology capabilities in India.

This collaboration is described as a first step in TASL’s satellite strategy and a significant milestone for Satellogic as it enters the fast-growing Indian market.

The project will commence with comprehensive training, knowledge transfer, and local assembly of optical sub-meter resolution EO satellites, the first of which is planned to be launched as TSAT-1A. The focus will be on manufacturing satellites and developing imagery in India for national defence and commercial applications, towards which TASL is commissioning a satellite AIT plant at its Vemagal facility in Karnataka, a state in southwest India.

Sukaran Singh, Chief Executive Officer and Managing Director, TASL, says: “Space is important to TASL not just as a business but also due to its culture of precision that will help other activities in TASL. We are pleased to announce our collaboration with Satellogic, a company with best-in-class technology and an entrepreneurial mindset. Additionally, TASL will also work with local SMEs for payloads and other technologies to bolster India content.”

TASL and Satellogic will collaborate on the development of a new satellite design and work together to integrate multiple payloads on a single satellite that will generate a diverse range of data over India.

“This collaboration will accelerate space capacity building for one of the largest nations in the world with the goal of enabling the advancement of commercial space capabilities and greater access to critical information for a range of applications such as security, sustainability, and energy,” says Emiliano Kargieman, Chief Executive Officer and Founder at Satellogic.

EXA Infrastructure has been putting some significant effort into its footprint in southeastern Europe this year. Today that effort is taking them across the Aegean Sea to directly connect Crete to their fiber network and bring bandwidth to the mythical home of the minotaur. … [visit site to read more]

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This Industry Viewpoint was authored by Suzy Menneret, Wholesale Advisor and Program Lead at the Mobile Ecosystem Forum (MEF)

One thing that has been a constant in the existence of a Mobile Network Operator over time is the ownership of two core elements: the network and the customer relationship.

This has been historically true in the consumer segment as a large proportion … [visit site to read more]