PLDT unit disrupts businesses
PLDT Inc., the country’s largest telecommunications company, has a disruptor in its own business that prepares the company for a full transition into the digital economy.
“The disruptor you describe is actually me. Because what I run in the PLDT Group is the disruptive part,” Orlando Vea, a co-founder of Smart Communications, the mobile arm of PLDT, said in the recent ACC 2017 or Asian Carriers Conference held in Lapu Lapu City, Cebu. The word ‘disruptor’ originated from the phrase ‘disruptive innovation’ which refers to a technology that creates a new market and in the process displaces traditional businesses.
Vea, 67, now heads Voyager Innovations Inc., the digital arm of PLDT and the one behind digital platforms such as Smart Padala (mobile remittances), PayMaya Philippines Inc. (formerly Smart e-Money), Freenet (free sponsored data platform), VYGR (digital performance-based marketing), Tackthis! (electronic commerce platform), Hatch, (marketing technology and innovations platform), Lendr (digital consumer loan platform), FINTQ (financial technology unit) and Voyager DX (digital transformation). Voyager, which has 600 employees, introduces solutions that allow customers to participate in the digital economy such as by using digital money.
Voyager houses all the digital innovations and services of PLDT Group. Vea said while PLDT started its business as a legacy carrier, it needed to transform as startup companies disrupted traditional businesses and redefined customer experience or CX. He said this is why Voyager thinks like a startup. “I would like to think that CX is better executed at the mainstream by considering yourself as a startup,” said Vea.
“A startup does not have the baggage of being disrupted by competition, as it is so focused on customer. That is a startup kind of thinking. The second one, we need to focus on customer experience before we even think of technology,” he said.
Vea said traditional telcos have never felt the love or loyalty of customers. “Life is unfair for telcos. Telcos are never loved. When your services are okay, then you are okay. But when it is down, you are hated. So it is an asymmetrical kind of relationship that you have with the world. I think that digital now presents an opportunity to be loved,” he said.
Vea said while the telco industry has brought the world together through connectivity, this has also shifted the attention to customer experience. “Once connectivity is there, you have to give customers more value than just connectivity. This is a work in progress for telcos,” he said.
“Now you can have a deeper connection emotionally, service-wise, communications-wise with your customers. That I think is where telcos should go. Telcos now have to run at two speeds. While winding the legacy business, telcos now have to create a separate parallel track to be more relevant to customers. That is about being more digitally connected to our customers,” said Vea.
Dindo Marzan, the managing director of Hatch, the digital transformation group of Voyager, said the company aims to own the digital space not only in the Philippines but also in other emerging markets.
“Voyager DX is basically digital transformation. To sum up, DX is digital experience. Either way, they are quite interchangeable. At the end of the day, it is focused on experience and transforming your business,” said Marzan.
“It has become our advocacy to make sure that we not only bridge the digital divide but actually enable enterprise companies to help us empower the digital consumers. We don’t move the needle. We break the needle. We do not just cross the finish line. We move the finish line. We change the game. This is the culture in Voyager. It is so much aligned with how other startups would design their company culture,” Marzan said.
Marzan said being a digital first company, Voyager started creating digital services. “Digital is changing humanity,” he said. “Because of digital technologies, everything has become easy. You use technology to be efficient, to be effective, to be informed, to make sure you are empowered. That’s how we position digital technology.”
Marzan presented data showing that 60 million or 58 percent of the Philippines’ 103 million people are Internet users. Active social medial users are 60 million as well. “Here in the Philippines, Internet is equal to Facebook and Facebook knows that. That is why they are heavily present here,” he said.
“In the Asia-Pacific region with 4.2 billion population, 46 percent are already Internet users and active social media users are 1.5 billion or 36 percent. Mobile connection is 3.99 billion and active mobile social users are 1.44 billion. This is exponentially growing and we have to prepare for it,” Marzan said.
Marzan said PLDT chairman Manuel Pangilinan allows PLDT Group to be disrupted because it is now ready for the transition. “As a business owner, you need to have self-awareness or self-assessment. Are you the one disrupting, or the one being disrupted? If you are very accepting that either you are being disrupted or the one that is disruptive, then that is a good starting point,” he said.
“For MVP, our chairman, he knows that the business is being disrupted. Hence, Voyager was created and he was very much open to disrupting himself. From his end, he needs to do both—manage the core business but venture into new businesses. Now, we are at this stage of working together with core business which is PLDT Global, ePLDT, Smart and all others under the PLDT Group,” said Marzan.
PLDT, which saw call and text businesses shrink because of Facebook Messenger and other over-the-top applications such as Viber and WhatsApp, expects an improvement in bottomline this year.
Consolidated core income in the first half still fell 2 percent to P17.4 billion from a year ago, but net income surged 33 percent to P16.5 billion. Consolidated service revenues declined 6 percent to P71.2 billion, mainly because of the 16-percent drop in wireless consumer business.
Data, broadband and digital platforms made up for the decline in wireless consumer business. This cluster of service revenues grew 11 percent to P32.6 billion and represented 46 percent of the total revenue mix. Mobile internet revenues climbed 18 percent to P9.6 billion, while corporate data and data center revenues rose 15 percent to P9.7 billion. Fixed home broadband revenues were up 19 percent to P8.4 billion.
Voyager, for one, has gained traction in its platforms and services for enterprises and consumers. PayMaya Philippines is now leading the adoption of cashless ecosystems by local governments. Cities such as Muntinlupa, Balanga, Malolos, Catbalogan and Tacloban are using PayMaya cards to disburse financial support and grants, and, to accept payments for services.
FINTQ, Voyager’s financial technology arm, launched a new commercial campaign for digital loans marketplace Lendr in June and saw a more than 20-fold increase in signups and loan applications in just a month. Lendr now counts on more than 40 banks and financial institutions as partners. Through Lendr, the partner institutions have disbursed more than P21 billion in loans to more than 200,000 borrowers.
Vea said PLDT’s evolution is in response to the demands of the new generation. “I think you just have to admit that the world now belongs to a different generation,” he said, referring to the mobile and digital-savvy millennials.