By Zuraimi AbdullahPublished: 2010/06/29
TIME dotCom Bhd (5031) will focus on increasing market share in the fixed broadband business under the second phase of its transformation plan.
Phase One of the initiative was completed when Time put its house back in order and reversed its losses in 2009, chief executive officer Afzal Abdul Rahim said.
For the next two years, the company wants to expand its fixed broadband offering to retail and corporate users to boost market share, Afzal said.
The fixed line broadband market is estimated at RM2.5 billion to RM3 billion a year, with Time having a less than 5 per cent share.
"We want to grow to something a bit more interesting than under 5 per cent," he told reporters after Time's annual general meeting in Kuala Lumpur yesterday.
The company was looking at chipping away market share in vertical sectors such as wholesale, corporate and government, he added.
Afzal said Time will spend more than RM100 million in capital expenditure this year, particularly on network rehabilitation and coverage expansion.
The data business consisting broadband, Internet and managed services will remain the company's main growth engine.
He said the data business accounted for 60 per cent of Time's revenue in 2009.
Time was back in the black in the year ended December 2009 with a net profit of RM33.1 million on a RM286.8 million turnover.
In 2008, it made a net loss of RM949.63 million on a revenue of RM286.52 million.
The company posted its fourth consecutive quarter of profits in the first quarter to March 2010, with the data business growing 14 per cent year-on-year.
Time plans to introduce its 50Mbps fibre-to-the-home (FTTH) connectivity to other areas in the Klang Valley.
It first launched the service dubbed Time Fibre Broadband at Mont Kiara in Kuala Lumpur early this year.
Afzal said Time Fibre Broadband has been well received.
The service, with a monthly fee of RM150, has captured about 2 per cent of the overall broadband subscribers in the area.
Time aimed to increase this to 20 per cent, he added.
http://www.btimes.com.my/Current_News/BTIMES/articles/taing/Article/
Tuesday, June 29, 2010
Monday, June 28, 2010
Belkin enhances wireless experience on new routers with apps Click on the picture for specifications
Belkin has introduced new Basic, Surf, Share and Play Max 802.11n wireless routers that also feature applications designed to enhance the wireless experience.
The apps enable users to play music, games, and HD videos as well as share photos and print wirelessly from anywhere in their home and each wireless router features different apps.
The apps include:
•Self Healing: Automatically detects and resolves network problems and runs routine maintenance scans to give the clearest wireless channel. Available on Basic, Surf, Share, and Play Max routers.
•Memory Safe: Automatically backs up photos and important files to an external hard drive (sold seperately). Available on Share and Play Max routers.
•Print Genie: Print wirelessly from any computer on the network from anywhere in the home. Available on Share and Play Max routers.
•Music Mover: Play MP3s from a music library on the home stereo wirelessly and connects an external hard drive on which to store music to the router -- and move music from a computer to the stereo through devices like Xbox 360 and PlayStation 3. Available on Play Max router.
•Music Labeler: Automatically identifies and labels tracks with the correct title, artist, and genre. Available on Play Max router.
•Daily DJ: Get daily personalised playlists from a music library based on your mood. Available on Play Max router.
•Torrent Genie: Downloads large media files like movies, music, and games, even when the computer isn´t on. Available on Play Max router.
•Bit Boost: Prioritises traffic on the network for video, gaming, and VoIP. Available on Play Max router.
Additionally, with advanced Dual-Band N technology, Belkin´s Play Max Routers also provide the best speed and performance. Simultaneous networks eliminate interference and allow optimal performance for media-intensive activities, such as streaming HD movies, gaming online, and downloading large media files.
"People want to do more with their photos, music, and videos throughout their home and across their network. Further, we found that while people had high aspirations for their network and media, unfortunately they were not buying routers capable of giving them the best of those experiences," said Jim Wagner, General Manager at Belkin.
"With that in mind, we created a line of wireless routers based around the activities people want to do most. We made our Surf, Share, and Play Routers powerful enough to give great networking experiences, and we added easy-to-use apps to enable these activities."
The products will be available starting mid July 2010.
Read more: http://mygadgets.my/product.php?id=1023/Article/index_html#ixzz0s9wr0AbV
The apps enable users to play music, games, and HD videos as well as share photos and print wirelessly from anywhere in their home and each wireless router features different apps.
The apps include:
•Self Healing: Automatically detects and resolves network problems and runs routine maintenance scans to give the clearest wireless channel. Available on Basic, Surf, Share, and Play Max routers.
•Memory Safe: Automatically backs up photos and important files to an external hard drive (sold seperately). Available on Share and Play Max routers.
•Print Genie: Print wirelessly from any computer on the network from anywhere in the home. Available on Share and Play Max routers.
•Music Mover: Play MP3s from a music library on the home stereo wirelessly and connects an external hard drive on which to store music to the router -- and move music from a computer to the stereo through devices like Xbox 360 and PlayStation 3. Available on Play Max router.
•Music Labeler: Automatically identifies and labels tracks with the correct title, artist, and genre. Available on Play Max router.
•Daily DJ: Get daily personalised playlists from a music library based on your mood. Available on Play Max router.
•Torrent Genie: Downloads large media files like movies, music, and games, even when the computer isn´t on. Available on Play Max router.
•Bit Boost: Prioritises traffic on the network for video, gaming, and VoIP. Available on Play Max router.
Additionally, with advanced Dual-Band N technology, Belkin´s Play Max Routers also provide the best speed and performance. Simultaneous networks eliminate interference and allow optimal performance for media-intensive activities, such as streaming HD movies, gaming online, and downloading large media files.
"People want to do more with their photos, music, and videos throughout their home and across their network. Further, we found that while people had high aspirations for their network and media, unfortunately they were not buying routers capable of giving them the best of those experiences," said Jim Wagner, General Manager at Belkin.
"With that in mind, we created a line of wireless routers based around the activities people want to do most. We made our Surf, Share, and Play Routers powerful enough to give great networking experiences, and we added easy-to-use apps to enable these activities."
The products will be available starting mid July 2010.
Read more: http://mygadgets.my/product.php?id=1023/Article/index_html#ixzz0s9wr0AbV
Time dotCom plans RM110m capex
Published: 2010/06/28Share PDF
Time dotCom Bhd (TdC) will spend about RM110 million on capital expenditure (capex) this year, with the bulk of investment for the expansion of its network coverage.
Chief executive officer Afzal Abdul Rahim said the company's focus for this year would be on expanding network coverage in key market segments, offering complete end-to-end communication solutions.
"We very much believe in the fixed-broadband business compared with mobile segment which is nearing saturation," he told reporters after the company's annual general meeting in Kuala Lumpur today.
"The growth that we see for the telecommunication industry going forward is the provision of data and Internet broadband services, that is where our focus is," he said.
Consisting of broadband, Internet and managed services, TdC's data business contributed 60 per cent of the company's revenue in 2009 and saw a double-digit growth of 14 per cent year-on-year in the first quarter ended March 31, 2010.
Riding on this growth, Afzal said TdC will edge out the competition by offering innovative data product packages and price plans that emphasised higher bandwidth capacity and service quality to meet the void in the current marketplace.
"We have already rolled out the country's first 50 megabits per second fibre-to-the-home connectivity at Mont Kiara in February this year and it is gaining momentum with an average revenue per user of RM150 per month. The next area will be in Kuala Lumpur city centre around the third quarter this year," he
said.
Afzal said the company was looking at gaining market share in vertical sectors such as wholesale, corporate and government.
The wholesale market segment is a biggest revenue contributor to TdC, with business growing by 29 per cent in 2009 and 39 per cent year-on-year in first quarter this year.
"We have made significant strides in a relatively short period. We now have a healthy balance sheet and more than enough to support our capex. Moving forward, I'm confident that the company is able to grow our market share from 2010 and beyond," he said.
TdC, Malaysia's alternative fixed-line telecommunication solution provider besides Telekom Malaysia Bhd and Maxis Bhd, has about RM175 million in cash to date.
It hosts the country’s most robust fibre-optic network with its 6,000 kilometres of land and submarine cables. -- Bernama
Read more: Time dotCom plans RM110m capex http://www.btimes.com.my/Current_News/BTIMES/articles/20100628223545/Article/index_html#ixzz0s9w3MnZ1
Time dotCom Bhd (TdC) will spend about RM110 million on capital expenditure (capex) this year, with the bulk of investment for the expansion of its network coverage.
Chief executive officer Afzal Abdul Rahim said the company's focus for this year would be on expanding network coverage in key market segments, offering complete end-to-end communication solutions.
"We very much believe in the fixed-broadband business compared with mobile segment which is nearing saturation," he told reporters after the company's annual general meeting in Kuala Lumpur today.
"The growth that we see for the telecommunication industry going forward is the provision of data and Internet broadband services, that is where our focus is," he said.
Consisting of broadband, Internet and managed services, TdC's data business contributed 60 per cent of the company's revenue in 2009 and saw a double-digit growth of 14 per cent year-on-year in the first quarter ended March 31, 2010.
Riding on this growth, Afzal said TdC will edge out the competition by offering innovative data product packages and price plans that emphasised higher bandwidth capacity and service quality to meet the void in the current marketplace.
"We have already rolled out the country's first 50 megabits per second fibre-to-the-home connectivity at Mont Kiara in February this year and it is gaining momentum with an average revenue per user of RM150 per month. The next area will be in Kuala Lumpur city centre around the third quarter this year," he
said.
Afzal said the company was looking at gaining market share in vertical sectors such as wholesale, corporate and government.
The wholesale market segment is a biggest revenue contributor to TdC, with business growing by 29 per cent in 2009 and 39 per cent year-on-year in first quarter this year.
"We have made significant strides in a relatively short period. We now have a healthy balance sheet and more than enough to support our capex. Moving forward, I'm confident that the company is able to grow our market share from 2010 and beyond," he said.
TdC, Malaysia's alternative fixed-line telecommunication solution provider besides Telekom Malaysia Bhd and Maxis Bhd, has about RM175 million in cash to date.
It hosts the country’s most robust fibre-optic network with its 6,000 kilometres of land and submarine cables. -- Bernama
Read more: Time dotCom plans RM110m capex http://www.btimes.com.my/Current_News/BTIMES/articles/20100628223545/Article/index_html#ixzz0s9w3MnZ1
Monday, June 21, 2010
Maxis out to maintain EBITDA margin
Wednesday June 16, 2010
By LEONG HUNG YEE
hungyee@thestar.com.my
KUALA LUMPUR: Maxis Bhd is working “very hard” to maintain is earnings before interest, tax, depreciation and amortisation (EBITDA) margin above the 50% level, according to chief executive officer Sandip Das.
“I can’t forecast (on EBITDA margin). I am, trying very hard,” he said at a briefing yesterday.
For the first quarter ended March 31, Maxis posted a net profit of RM552mil on revenue of RM2.15bil. Its EBITDA margin stood at 50.3% for the period, rising 0.3 percentage points against the preceding quarter.
Das said Maxis was working towards maintaining that by focusing on revenue growth and operating cost, among others.
He said the EBITDA margin was somehow squeezed as the rate for voice call had dropped tremendously but it was also pushing other non-voice revenue such as broadband.
For its first quarter, Maxis’ mobile Internet users grew by some 23% quarter-on-quarter to 6.4 million. Non-voice revenue also contributed higher to the telco’s revenue.
Over the past six months, Maxis’ broadband base had increased over 65%. However, its average revenue per user (ARPU) for broadband was lower due to promotions.
Das said Maxis would invest RM1.4bil this year in capital expenditure (capex) to widen its broadband footprint in Malaysia while improving reliability and operational efficiencies. Last year, Maxis invested RM1.24bil in capex to upgrade and modernise its network.
Das said Maxis would also be increasing its high-speed wireless broadband coverage to 80% from 57% of the population and deploying new capabilities through its information technology transformation.
To a question, Das said Maxis had no problem funding its capex internally. “Our EBITDA was 50.3% in the first quarter and if we continue that, we will have no problem supporting the capex from within.”
On the recent tie-up of its rivals DiGi.Com Bhd and Celcom Axiata Bhd, Das said it was a good move for the industry as it would enable telcos to share some resources and yet develop a new territory together.
“It will help reduce the infrastructure cost,” he said.
Das said Maxis currently shared some 40% of its network towers and welcomes any players to ride on its infrastructure.
On analysts concerns of Maxis’ declining ARPU, Das said: “I don’t think analysts give us enough credit. We are working very hard towards our 50% EBITDA margin. Our benchmark has changed. We’re no longer just a celullar operator. We are an integrated telecommunications company.”
Asked on its second quarter performance, Das said while he cannot provide any forecast, he felt “a happy man”.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/16/business/6478792&sec=business
By LEONG HUNG YEE
hungyee@thestar.com.my
KUALA LUMPUR: Maxis Bhd is working “very hard” to maintain is earnings before interest, tax, depreciation and amortisation (EBITDA) margin above the 50% level, according to chief executive officer Sandip Das.
“I can’t forecast (on EBITDA margin). I am, trying very hard,” he said at a briefing yesterday.
For the first quarter ended March 31, Maxis posted a net profit of RM552mil on revenue of RM2.15bil. Its EBITDA margin stood at 50.3% for the period, rising 0.3 percentage points against the preceding quarter.
Das said Maxis was working towards maintaining that by focusing on revenue growth and operating cost, among others.
He said the EBITDA margin was somehow squeezed as the rate for voice call had dropped tremendously but it was also pushing other non-voice revenue such as broadband.
For its first quarter, Maxis’ mobile Internet users grew by some 23% quarter-on-quarter to 6.4 million. Non-voice revenue also contributed higher to the telco’s revenue.
Over the past six months, Maxis’ broadband base had increased over 65%. However, its average revenue per user (ARPU) for broadband was lower due to promotions.
Das said Maxis would invest RM1.4bil this year in capital expenditure (capex) to widen its broadband footprint in Malaysia while improving reliability and operational efficiencies. Last year, Maxis invested RM1.24bil in capex to upgrade and modernise its network.
Das said Maxis would also be increasing its high-speed wireless broadband coverage to 80% from 57% of the population and deploying new capabilities through its information technology transformation.
To a question, Das said Maxis had no problem funding its capex internally. “Our EBITDA was 50.3% in the first quarter and if we continue that, we will have no problem supporting the capex from within.”
On the recent tie-up of its rivals DiGi.Com Bhd and Celcom Axiata Bhd, Das said it was a good move for the industry as it would enable telcos to share some resources and yet develop a new territory together.
“It will help reduce the infrastructure cost,” he said.
Das said Maxis currently shared some 40% of its network towers and welcomes any players to ride on its infrastructure.
On analysts concerns of Maxis’ declining ARPU, Das said: “I don’t think analysts give us enough credit. We are working very hard towards our 50% EBITDA margin. Our benchmark has changed. We’re no longer just a celullar operator. We are an integrated telecommunications company.”
Asked on its second quarter performance, Das said while he cannot provide any forecast, he felt “a happy man”.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/16/business/6478792&sec=business
Telco tie-up could lead to more dividends
Saturday June 12, 2010
By RISEN JAYASEELAN
risen@thestar.com.my
PETALING JAYA: While the network and infrastructure collaboration between Celcom Axiata Bhd and DiGi.Com Bhd promises to bring about cost savings for the two companies, it is still early days to know if this will translate into better dividends from both companies, analysts said.
“It’s short-term neutral but potentially long-term positive, depending on the finalisation of the plan, and if and when the third stage will be achieved,” a telecommunications analyst with a foreign research house pointed out.
“Before we reach that stage, it is difficult to assume that there will be significant savings that can translate into better dividends,” he added.
To recap, the two telcos signed a memorandum of understanding (MoU) on Thursday for an active sharing of network and infrastructure, covering operations and maintenance, transmission and site sharing, and radio access network.
ECM Libra said in a research note yesterday that it was positive on the collaboration, subject to the signing of the definitive agreement by year’s end.
“Reducing costs will boost margins and generate bottom-line growth (for Celcom and DiGi), which has tapered off due to the saturating mobile market.
“Also, Celcom and DiGi stand to close the gap with Maxis, which currently commands the highest EBITDA (earnings before interest, tax, depreciation and amortisation) margins.
“In addition to operational expenditure savings, we believe both parties may benefit from significant capital expenditure savings as well, in terms of 3G rollout,” ECM Libra said.
The research house said this in turn would free up more cashflow for DiGi to sustain its high dividend payouts, as well as for Axiata, which is expected to announce a more concrete dividend policy in the third quarter of 2010 for its maiden dividend payment in FY2011.
But ECM Libra added: “As it is still early days, we make no changes to our earnings forecasts for now, pending the signing of a definitive agreement.”
Meanwhile, RHB Research in a report yesterday reckons that the collaboration would allow Celcom to expand its capacity requirement in city areas at lower cost, given that DiGi tends to have a stronger presence in urban areas.
“Celcom’s network cost has been around 9.6% of revenue since Q4 FY2009, which would suggest that in order to squeeze out further savings, some form of collaboration would be required,” it said.
It is still unclear at this point though as to how Maxis Bhd, the largest mobile operator in Malaysia, will react to the collaboration between its two competitors.
“Going by the trend seen in other developed markets, Maxis may possibly be left out in the cold,” ECM Libra said.
Another analyst pointed out though that Maxis still has the option of joining this collaboration. “Maxis could also embark on other cost-savings measures to ensure it, too, protects its attractive EBITDA margins,” the analyst added.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/12/business/6454387&sec=business
By RISEN JAYASEELAN
risen@thestar.com.my
PETALING JAYA: While the network and infrastructure collaboration between Celcom Axiata Bhd and DiGi.Com Bhd promises to bring about cost savings for the two companies, it is still early days to know if this will translate into better dividends from both companies, analysts said.
“It’s short-term neutral but potentially long-term positive, depending on the finalisation of the plan, and if and when the third stage will be achieved,” a telecommunications analyst with a foreign research house pointed out.
“Before we reach that stage, it is difficult to assume that there will be significant savings that can translate into better dividends,” he added.
To recap, the two telcos signed a memorandum of understanding (MoU) on Thursday for an active sharing of network and infrastructure, covering operations and maintenance, transmission and site sharing, and radio access network.
ECM Libra said in a research note yesterday that it was positive on the collaboration, subject to the signing of the definitive agreement by year’s end.
“Reducing costs will boost margins and generate bottom-line growth (for Celcom and DiGi), which has tapered off due to the saturating mobile market.
“Also, Celcom and DiGi stand to close the gap with Maxis, which currently commands the highest EBITDA (earnings before interest, tax, depreciation and amortisation) margins.
“In addition to operational expenditure savings, we believe both parties may benefit from significant capital expenditure savings as well, in terms of 3G rollout,” ECM Libra said.
The research house said this in turn would free up more cashflow for DiGi to sustain its high dividend payouts, as well as for Axiata, which is expected to announce a more concrete dividend policy in the third quarter of 2010 for its maiden dividend payment in FY2011.
But ECM Libra added: “As it is still early days, we make no changes to our earnings forecasts for now, pending the signing of a definitive agreement.”
Meanwhile, RHB Research in a report yesterday reckons that the collaboration would allow Celcom to expand its capacity requirement in city areas at lower cost, given that DiGi tends to have a stronger presence in urban areas.
“Celcom’s network cost has been around 9.6% of revenue since Q4 FY2009, which would suggest that in order to squeeze out further savings, some form of collaboration would be required,” it said.
It is still unclear at this point though as to how Maxis Bhd, the largest mobile operator in Malaysia, will react to the collaboration between its two competitors.
“Going by the trend seen in other developed markets, Maxis may possibly be left out in the cold,” ECM Libra said.
Another analyst pointed out though that Maxis still has the option of joining this collaboration. “Maxis could also embark on other cost-savings measures to ensure it, too, protects its attractive EBITDA margins,” the analyst added.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/12/business/6454387&sec=business
Maxis mulls options to raise up to RM4.5b
Thursday June 17, 2010
KUALA LUMPUR: Maxis Bhd is preparing to raise as much as RM4.5bil to upgrade its network and pay back debt, chief financial officer Rossana Rashidi said.
The carrier, controlled by billionaire T. Ananda Krishnan, was in talks with bankers to weigh options that included the company’s first sale of bonds, Rossana said in an interview on Tuesday. Maxis may raise the funds in the next three to six months, she said.
Rossana Rashidi
The company plans to invest RM1.4bil on its mobile phone and broadband networks this year as revenue from voice calls shrinks. Analysts estimate Maxis’s profit will climb to RM2.46bil this year, fuelled by demand for wireless Internet access.
“They need to raise long-term money to be used for capital expenditure and a combination of other things,” said Jeffrey Tan, an analyst at OSK Research Sdn Bhd.
“Perhaps a special dividend is one of them.” OSK has a “neutral” rating on Maxis and a share price estimate of RM5.80.
Maxis closed down one sen to RM5.30 yesterday.
The company would use RM2.5bil of the proceeds to repay a bridging loan and the rest for capital expenditure, Rossana said. Maxis’ initial public offering raised RM11.2bil for the parent in November.
Maxis has a net debt-to-equity ratio of 43%, compared with 17% for Advanced Info Service Pcl of Thailand, 57% for Philippine Long Distance Telephone Co and 124% for Indonesia’s PT Indosat, according to Bloomberg data.
Maxis and its parent, Maxis Communications Bhd, don’t have debt ratings. Binariang GSM Sdn Bhd, which owns a controlling stake in Maxis Communications, is rated AA3 by Rating Agency Malaysia Bhd.
The mobile phone operator was exploring both Islamic and conventional financing, Rossana said. It was also considering whether to use ringgit or dollars, she said.
The company had RM8.32bil in liabilities as at March 31, according to data compiled by Bloomberg.
Profit is poised to climb 56% to RM2.46bil this year, according to the average of 26 analyst estimates compiled by Bloomberg. The company, which has more than 12.6 million subscribers, posted profit of RM552mil last quarter.
Maxis wanted to expand its third-generation network to reach 80% of Malaysia’s population by the year-end, it said in Tuesday’s statement.
“Clearly, there’s a lot of pressure on voice,” chief executive officer Sandip Das said in an interview. “The next revenue is going to come from underserved geography, data and broadband. That’s where the company is investing big time.” — Bloomberg
http://biz.thestar.com.my/news/story.asp?file=/2010/6/17/business/6483913&sec=business
KUALA LUMPUR: Maxis Bhd is preparing to raise as much as RM4.5bil to upgrade its network and pay back debt, chief financial officer Rossana Rashidi said.
The carrier, controlled by billionaire T. Ananda Krishnan, was in talks with bankers to weigh options that included the company’s first sale of bonds, Rossana said in an interview on Tuesday. Maxis may raise the funds in the next three to six months, she said.
Rossana Rashidi
The company plans to invest RM1.4bil on its mobile phone and broadband networks this year as revenue from voice calls shrinks. Analysts estimate Maxis’s profit will climb to RM2.46bil this year, fuelled by demand for wireless Internet access.
“They need to raise long-term money to be used for capital expenditure and a combination of other things,” said Jeffrey Tan, an analyst at OSK Research Sdn Bhd.
“Perhaps a special dividend is one of them.” OSK has a “neutral” rating on Maxis and a share price estimate of RM5.80.
Maxis closed down one sen to RM5.30 yesterday.
The company would use RM2.5bil of the proceeds to repay a bridging loan and the rest for capital expenditure, Rossana said. Maxis’ initial public offering raised RM11.2bil for the parent in November.
Maxis has a net debt-to-equity ratio of 43%, compared with 17% for Advanced Info Service Pcl of Thailand, 57% for Philippine Long Distance Telephone Co and 124% for Indonesia’s PT Indosat, according to Bloomberg data.
Maxis and its parent, Maxis Communications Bhd, don’t have debt ratings. Binariang GSM Sdn Bhd, which owns a controlling stake in Maxis Communications, is rated AA3 by Rating Agency Malaysia Bhd.
The mobile phone operator was exploring both Islamic and conventional financing, Rossana said. It was also considering whether to use ringgit or dollars, she said.
The company had RM8.32bil in liabilities as at March 31, according to data compiled by Bloomberg.
Profit is poised to climb 56% to RM2.46bil this year, according to the average of 26 analyst estimates compiled by Bloomberg. The company, which has more than 12.6 million subscribers, posted profit of RM552mil last quarter.
Maxis wanted to expand its third-generation network to reach 80% of Malaysia’s population by the year-end, it said in Tuesday’s statement.
“Clearly, there’s a lot of pressure on voice,” chief executive officer Sandip Das said in an interview. “The next revenue is going to come from underserved geography, data and broadband. That’s where the company is investing big time.” — Bloomberg
http://biz.thestar.com.my/news/story.asp?file=/2010/6/17/business/6483913&sec=business
Maxis under dividend pressure
Tuesday June 22, 2010
By LEE KIAN SEONG
lks@thestar.com.my
Group’s India ops facing increasing funding needs
PETALING JAYA: With its major shareholder Maxis Communications Bhd (MCB) facing increasing funding needs for the Indian market, Maxis Bhd is under pressure to declare more dividends, according to analysts.
The unlisted MCB’s Indian unit Aircel Ltd recently won wireless broadband Internet licences in eight circles in India, for which it had to pay US$750mil. This is aside from the US$1.3bil it had to pay for the previous 3G licenses last month.
MCB owns 70% of Maxis as at April 19. To recap, Aircel and other overseas assets of the Maxis group was carved out of Maxis when the latter was relisted on Bursa Malaysia on Nov 18 last year.
AmResearch said: “This puts more strain on Aircel’s cash flow for capital investment in the next five to seven years. This may put pressure on Maxis to pay dividends to MCB to part-finance this new undertaking.” It said Maxis had not commented on special dividends in store this year but this could be the excuse it was looking, adding that Maxis currently had a net debt to equity ratio of 455%.
“Early last week, its management mentioned that it might issue debt up to RM4.5bil this year. This capital management may indicate that Maxis is gearing up to pay dividends,” it said in a statement.
Analysts say rising costs in MCB's India operations, through unit Aircel, may put a strain on Aircel's cashflow.
Another local analyst said Aircel was committed to be a significant player in India, thus a significant investment was needed.
“This will eventually affect Maxis’ profit growth going forward as the major shareholder needs more capital to fund Aircel expansion in India,” he said, adding that this might increase the dividend payout from Maxis.
AmResearch said there was no immediate impact on Axiata Bhd, as its unit Idea did not enter the bidding in India at all.
“However, in the long run, the dynamics of Internet access market might change and put some risk on Idea’s long-term sustainability,” it said. It noted that Axiata’s Idea and DiGi’s sister company Uninor passed the chance to bid.
“Idea is concentrating on 3G licences it already has while Uninor is not vying for Internet subscribers as yet,” it said.
According to AmResearch, the Indian government raised over 385 billion rupees (US$8.2bil) from the broadband service exercise, this after raking in 677 billion rupees (US$14.4bil) from auctioning 3G licences. The Government had offered two slots of bandwidth to offer wireless broadband Internet services in the country’s 22 service areas.
Some established cellular players like Reliance Communication, Vodafone-Essar and Idea Cellular had opted out as they perceived the prices to be unrealistically high. Newcomer Infotel Broadband Services, which is related to Mukesh Ambani’s Reliance Industries, bid for and got the only all-India licence across all areas for 128 billion rupees (US$2.74bil).
Another recipient of the licence, Qualcomm, spent US$1bil to buy slots of broadband in metros Delhi and Mumbai and the states of Kerala and Haryana.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/22/business/6516441&sec=business
By LEE KIAN SEONG
lks@thestar.com.my
Group’s India ops facing increasing funding needs
PETALING JAYA: With its major shareholder Maxis Communications Bhd (MCB) facing increasing funding needs for the Indian market, Maxis Bhd is under pressure to declare more dividends, according to analysts.
The unlisted MCB’s Indian unit Aircel Ltd recently won wireless broadband Internet licences in eight circles in India, for which it had to pay US$750mil. This is aside from the US$1.3bil it had to pay for the previous 3G licenses last month.
MCB owns 70% of Maxis as at April 19. To recap, Aircel and other overseas assets of the Maxis group was carved out of Maxis when the latter was relisted on Bursa Malaysia on Nov 18 last year.
AmResearch said: “This puts more strain on Aircel’s cash flow for capital investment in the next five to seven years. This may put pressure on Maxis to pay dividends to MCB to part-finance this new undertaking.” It said Maxis had not commented on special dividends in store this year but this could be the excuse it was looking, adding that Maxis currently had a net debt to equity ratio of 455%.
“Early last week, its management mentioned that it might issue debt up to RM4.5bil this year. This capital management may indicate that Maxis is gearing up to pay dividends,” it said in a statement.
Analysts say rising costs in MCB's India operations, through unit Aircel, may put a strain on Aircel's cashflow.
Another local analyst said Aircel was committed to be a significant player in India, thus a significant investment was needed.
“This will eventually affect Maxis’ profit growth going forward as the major shareholder needs more capital to fund Aircel expansion in India,” he said, adding that this might increase the dividend payout from Maxis.
AmResearch said there was no immediate impact on Axiata Bhd, as its unit Idea did not enter the bidding in India at all.
“However, in the long run, the dynamics of Internet access market might change and put some risk on Idea’s long-term sustainability,” it said. It noted that Axiata’s Idea and DiGi’s sister company Uninor passed the chance to bid.
“Idea is concentrating on 3G licences it already has while Uninor is not vying for Internet subscribers as yet,” it said.
According to AmResearch, the Indian government raised over 385 billion rupees (US$8.2bil) from the broadband service exercise, this after raking in 677 billion rupees (US$14.4bil) from auctioning 3G licences. The Government had offered two slots of bandwidth to offer wireless broadband Internet services in the country’s 22 service areas.
Some established cellular players like Reliance Communication, Vodafone-Essar and Idea Cellular had opted out as they perceived the prices to be unrealistically high. Newcomer Infotel Broadband Services, which is related to Mukesh Ambani’s Reliance Industries, bid for and got the only all-India licence across all areas for 128 billion rupees (US$2.74bil).
Another recipient of the licence, Qualcomm, spent US$1bil to buy slots of broadband in metros Delhi and Mumbai and the states of Kerala and Haryana.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/22/business/6516441&sec=business
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