Hong Kong IT player eyes expansion in South-east Asia

Singapore

INFORMATION technology (IT) firm PCCW Solutions, which began a push into South-east Asia in late 2017, aims to grow the regional business to the size of its North Asian home market - such as Hong Kong, Taiwan and mainland China - in the next five years.

That expansion target comes straight from Ramez Younan, managing director of Hong Kong-listed telecom player PCCW's wholly owned IT arm, though "if we can do it before then, I would welcome it very much".

PCCW Solutions last posted turnover of HK$1.72 billion (S$301 million) for the six months to June 30, with the parent citing progress in its regional expansion despite the weakness in the mainland Chinese market.

"My ambition is to make here as big as what we are in North Asia, so we will continue to push organically," Mr Younan told The Business Times. "If we find anything inorganic that helps us and helps our customers, we will do it." He was in town for the official opening of PCCW Solutions' office on Tuesday.

The Suntec City head office, which tripled its floor area to 12,000 square feet, serves as headquarters for South-east Asia, supporting clients in Singapore, Indonesia and Thailand.

To fuel the expansion, PCCW Solutions - which had six employees in Singapore in late 2017 - is on track for a headcount of 700 by year-end, and 1,000 by the middle of 2020.

PCCW Solutions plans to compete regionally on innovation and price, as most Asian markets are "a step behind Hong Kong and Singapore".

"The trend is shifting from one-size-fits-all solutions designed in the West to be implemented here, to more personalised transformation that suits the customers and citizens here in this region... Our price point is closer to what the customer can spend, as well as giving them the ability to have multi-country access."

The company made a splash here in April, with a deal to consult on a smart fibre network by a joint venture between ST Engineering and SP Group.

"We've extended that now to actually becoming the implementer of that digital transformation as well," said Mr Younan, noting that the tie-up taps PCCW Solutions' experience working with Hong Kong Telecom, a subsidiary of the parent PCCW Group.

He is banking on more order wins from such high-profile contracts, adding: "It's getting really good traction because it provides something that is not here in the market... All of a sudden, you have a boost of investments happening behind that."

Last month, PCCW Solutions also inked a deal to buy the Singapore operations of struggling India-listed IT player HCL Infosystems, on a debt-free, cash-free basis, for S$42 million.

But Mr Younan declined to share an investment budget for the South-east Asian expansion, saying: "We don't take any sort of hypothetical numbers to just force it in."

PCCW Solutions has netted about a half-dozen customers in Singapore, Indonesia and Thailand since the regional debut, Mr Younan told BT.

Besides its core IT business, the company is also counting on a regional foray into data centres. PCCW Solutions launched a strategic business alliance called D-Infinitum in 2016, which was billed as giving enterprise clients access to a network of global data centres worldwide - including one centre, by a partner, here.

Satellite markets such as Malaysia, Indonesia, Thailand and Vietnam are expected to grow alongside "tier-one" hubs like Hong Kong, Singapore, Seoul, Tokyo and Osaka, he noted.

Real estate consultancy Cushman & Wakefield recently projected that South-east Asia will soon see the world's fastest growth in co-located data centres, which lease capacity and offer data centre services, as compound annual growth could hit 13 per cent over the next five years.

Still, when asked whether he has an ideal revenue breakdown between the IT and data centre segments, Mr Younan quipped: "They are all my sons and daughters. They can all grow as much as they want."