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Indosat Ooredoo Hutchison's (IOH) boss Vikram Sinha talks about becoming an AI-native telco, driving 5G-AI integration, rural connectivity and supporting Indonesia's AI ambitions.
Over the last few months, Indonesia's second-largest service provider, Indosat Ooredoo Hutchison (IOH), has been in the news regarding its ambition to become an AI-native telco.
In this interview, IOH's President Director and Chief Executive Officer, Vikram Sinha, throws light on how AI is central to its growth strategy, market consolidation in the country and why 5G and AI together will grow this year.
Journey to becoming AI-native telco
In August 2024, IOH revealed its Indosat AI Northstar roadmap, which included its ambition to become an AI-native telco. As part of this, IOH plans to aggressively use AI in its operations and develop new business streams to double its EBITDA over the next five-to-six years. "We are working with Google on their Vertex architecture. We have implemented around 10 use cases, specifically around churn reduction and growing ARPU. We have seen some early wins. However, I will say we are in the early stages of our journey," says Sinha. "The measure of success for 2025 will be how we grow our ARPU, how we reduce our churn, and how we provide hyper-personalization," adds Sinha.
IOH has also recently signed a Memorandum of Understanding (MoU) with AIonOS, a Gurugram-based AI company, to develop applications in food security, tourism and talent development for the Indonesian market. AIonOS, in partnership with IOH, plans to work with Deepseek to open an AI center of excellence in Indonesia. Deepseek has recently released an AI model that displays analytical capabilities similar to OpenAI's ChatGPT. AIonOS and IOH had earlier partnered to launch the AI3 initiative, which aims to "create transformative solutions" for Indonesia.
IOH, through its subsidiary Lintasarta, has invested around $250 million in putting up an AI factory, which went live in October 2024. "We started with the H100 (NVIDIA GPU) and now we are talking about NVIDIA Blackwell GB200. We have more than 20 customers from Indonesia now," elaborated Sinha.
IOH's AI strategy is aligned with Indonesia's AI ambition to leverage AI to boost its economy, as part of the Golden Indonesia 2045 vision. "The most important things in creating an AI factory are power, water, and land, and Indonesia has all those things. Our mission is to ensure that we are able to position Indonesia as an infra country because it is blessed with everything that is needed for us in this AI era," says Sinha.
The journey to becoming an AI-native telco is not without challenges. "The most important thing is building capability. AI is all about investing in people. So that's an opportunity, but if not handled well, it becomes a big challenge and bottleneck. So, investing in talent and building capability so that we can make our AI factory ready to serve the regional and global needs on one side. On the other side, we have to ensure early adaptation of AI in Indonesia," says Sinha. "There is also a talent gap of 10 million people. Our partnership and collaboration are helping us bridge that gap. So we have committed 1 million and we want to see how we can scale it up. And that is where our biggest focus has been."
Impact of merger of XL Axiata and Smartfren
Last month, two Indonesian service providers, XL Axiata and Smartfren, merged to form XLSmart Telecom. "It is good for the industry. It [Telecom] is a scale business, so we should see more ARPU [Average Revenue Per User] growth," says Sinha, commenting on the impact of the merger.
Sinha also emphasized the success of the merger between Indosat and Ooredoo Hutchison in 2022, which created Indosat Ooredoo Hutchison. "When we went through the merger in 2022, everyone had written us off because, historically, telco mergers have struggled. So when we merged, Fitch and Moody's had put us on a negative watch list, and within a year, they put us in Neutral, and in the second year, they made it A++."
On slow progress of 5G
Though IOH launched 5G services in 2021, it is present only in eight cities in the country. Commenting on 5G's relatively slow progress in Indonesia, Sinha said that 5G's "time has come now. Globally, we did not see much coming from 5G, but I am very optimistic about Agentic AI coupled with 5G, which can solve several problems. How every child can have a personal tutor, how everyone can have a personal nurse … these things will become a reality. So, personally, I don't see it as a delay … you will see much more of AI plus 5G together through 2025. And I think it's a blessing… Sometimes, it is good to be late." In December 2024, IOH announced a deal with Finnish vendor Nokia for its 4G and 5G expansion.
Focus areas for 2025
IOH is planning to invest in further improving the experience in rural areas of the country. "We are significantly investing in experience not only in top cities but in the rural areas as well. We have to ensure that nobody is left behind. And now, with our scale and size, this is what people expect." The service provider has recently deployed over 550 ultra-capacity microwave backbone links in collaboration with Chinese vendor ZTE to expand 4G coverage in remote and rural areas.
Indonesia is the world's largest archipelago with 17,000 islands, making it challenging to improve customer experience in remote and rural areas. "We will do whatever it takes, but we'll use everything, whether it is LEO, GEO, fiber … it is a mix of everything. Transport is one of the biggest challenges and bottlenecks and now new technologies are coming in and I see it will get better," says Sinha.
While Sinha didn't comment on whether IOH has formed a partnership with a satellite company, he mentioned that the company is "working with everyone to connect the unconnected." Lintasarta, IOH's subsidiary, collaborated with Intelsat in 2023 to increase coverage in rural and remote areas.
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