Monday, November 29, 2010
TM profit surges on operating revenue and disposal gains
Saturday November 27, 2010
KUALA LUMPUR: Telekom Malaysia Bhd's (TM) net profit for its third quarter surged 145% to RM438.49mil from RM179.07mil before mainly due to higher operating revenue and higher gain on disposal of investments.
Revenue for the quarter ended Sept 30 increased to RM2.19bil from RM2.10bil a year earlier mainly on higher revenue from data and other telecommunications-related services, which mitigated the impact of lower revenue from voice and non-telecoms services, TM told Bursa Malaysia yesterday.
Data revenue increased by 24.6% in the third quarter to RM440.9mil compared with RM353.9mil in the same quarter 2009 arising from demand for higher bandwidth services.
Other telecommunications-related services revenue increased by 34.2% in the third quarter to RM320.7mil compared with RM238.9mil in 2009 mainly due to higher revenue from customers' projects such as MERS 999 and income from HSBB (high-speed broadband) grant, it said.
Revenue from Internet and multimedia rose 1.4% to RM411.1mil arising from the increase in broadband customers to 1.6 million during the quarter from 1.4 million in the corresponding period of 2009, TM said.
For the nine months ended Sept 30, TM's net profit surged to RM805.82mil from RM472.78mil a year earlier while revenue increased to RM6.47bil from RM6.34bil.
On prospects going forward, the company said the broadband market was set to grow further as the country moved rapidly toward Internet-based activities and transactions.
Broadband service is now gradually being seen as a necessity for the average Malaysian and this was evident in the strong take-up rate for TM's broadband services recorded over the previous quarters, it said.
According to TM, the number of UniFi users has exceeded 21,000 while premises breached the 700,000 level as at Nov 15.
UniFi has also been expanded to cover a total of 26 exchange areas with seven of those located in industrial zones in Johor, Penang, Kedah and Selangor.
By end-2010, TM is expected to meet the target of 48 exchange areas being served by UniFi with 750,000 premises passed, it said.
TM said it expected the business environment for the year ending Dec 31 to remain challenging.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/27/business/7511399&sec=business
KUALA LUMPUR: Telekom Malaysia Bhd's (TM) net profit for its third quarter surged 145% to RM438.49mil from RM179.07mil before mainly due to higher operating revenue and higher gain on disposal of investments.
Revenue for the quarter ended Sept 30 increased to RM2.19bil from RM2.10bil a year earlier mainly on higher revenue from data and other telecommunications-related services, which mitigated the impact of lower revenue from voice and non-telecoms services, TM told Bursa Malaysia yesterday.
Data revenue increased by 24.6% in the third quarter to RM440.9mil compared with RM353.9mil in the same quarter 2009 arising from demand for higher bandwidth services.
Other telecommunications-related services revenue increased by 34.2% in the third quarter to RM320.7mil compared with RM238.9mil in 2009 mainly due to higher revenue from customers' projects such as MERS 999 and income from HSBB (high-speed broadband) grant, it said.
Revenue from Internet and multimedia rose 1.4% to RM411.1mil arising from the increase in broadband customers to 1.6 million during the quarter from 1.4 million in the corresponding period of 2009, TM said.
For the nine months ended Sept 30, TM's net profit surged to RM805.82mil from RM472.78mil a year earlier while revenue increased to RM6.47bil from RM6.34bil.
On prospects going forward, the company said the broadband market was set to grow further as the country moved rapidly toward Internet-based activities and transactions.
Broadband service is now gradually being seen as a necessity for the average Malaysian and this was evident in the strong take-up rate for TM's broadband services recorded over the previous quarters, it said.
According to TM, the number of UniFi users has exceeded 21,000 while premises breached the 700,000 level as at Nov 15.
UniFi has also been expanded to cover a total of 26 exchange areas with seven of those located in industrial zones in Johor, Penang, Kedah and Selangor.
By end-2010, TM is expected to meet the target of 48 exchange areas being served by UniFi with 750,000 premises passed, it said.
TM said it expected the business environment for the year ending Dec 31 to remain challenging.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/27/business/7511399&sec=business
Sunday, November 28, 2010
Implementation of New Public Cellular Phone Numbering With 3 Plus 8
The Malaysian Communications and Multimedia Commission (MCMC) has announced on the 1st October 2010 that a new mobile prefix “011” has been opened to be shared by the mobile telephone operators. This prefix is the first three numbers followed by the eight-digit telephone number and also known as 3 + 8 Public Cellular Phone Numbering. The decision to open a new shared prefix “011” is one of the measures to accommodate the public cellular service providers’ additional requirement for numbers. Through another announcement made by MCMC on the 2nd November 2010,a briefing was held at MCMC Headquarters which was attended by industry members,regulatory bodies, the media, consumer forums and interested parties.The briefing sought to enhance participants understanding of the new public cellular numbering system.
The new public cellular phone numbering will take off with the prefix-011 followed by eight digit numbers (011 1XXX XXXX), set to be launched on 15 December 2010. This is one of the long-term planning measures undertaken by MCMC after taking into consideration that the existing public cellular phone numbering format of 3 + 7 is running out and will not be able to support and accommodate the demands from the industry in the near future. However, these additional allocations will not a replacement to the existing prefixes for public cellular numbers that are currently in use, such as 010, 012, 013, 014, 016, 017, 018 and 019. The accompanying seven digit subscriber numbers used with these prefixes will continue to be used.
This new implementation is also a result of the increase in the number of cellular service providers and the potential of various service applications which will be made available due to the advancement of communication technologies.
The prefix 011 is intended to be shared by all the existing service providers to provide additional new mobile numbers to be shared by the operators under one common dialing prefix.
Sources : http://www.skmm.gov.my/
The new public cellular phone numbering will take off with the prefix-011 followed by eight digit numbers (011 1XXX XXXX), set to be launched on 15 December 2010. This is one of the long-term planning measures undertaken by MCMC after taking into consideration that the existing public cellular phone numbering format of 3 + 7 is running out and will not be able to support and accommodate the demands from the industry in the near future. However, these additional allocations will not a replacement to the existing prefixes for public cellular numbers that are currently in use, such as 010, 012, 013, 014, 016, 017, 018 and 019. The accompanying seven digit subscriber numbers used with these prefixes will continue to be used.
This new implementation is also a result of the increase in the number of cellular service providers and the potential of various service applications which will be made available due to the advancement of communication technologies.
The prefix 011 is intended to be shared by all the existing service providers to provide additional new mobile numbers to be shared by the operators under one common dialing prefix.
Sources : http://www.skmm.gov.my/
Wednesday, November 24, 2010
Saturday, November 20, 2010
YTL Comms extending coverage
Saturday November 20, 2010
Its Yes service will cover 80% of population by end-2011 from 65% now
KUALA LUMPUR: YTL Communications Sdn Bhd (YTL Comms) will roll out its 4G mobile Internet-with-voice service, Yes, to cover 80% of the population by end-2011.
YTL Comms, a unit of YTL Power International Bhd, currently has a coverage of 65%. To date, it has invested some RM2.5bil in the Yes 4G infrastructure.
We will extend to Sabah and Sarawak at the right time, executive director Datuk Yeoh Seok Hong told a briefing prior to the service launch by Deputy Prime Minister Tan Sri Muhyiddin Yassin yesterday.
Seok Hong said that with 1,500 base stations, the event marked the largest network ever launched in the country.
We still have 1,000 base stations to be deployed. By then, 80% of the population will be covered, he said.
Chief executive officer Wing K. Lee said Yes was the most affordable 4G mobile Internet-with-voice service in Malaysia.
He said its pay-as-you-go rate of nine sen for 3MB (megabit) data, one-minute call or one short-messaging service was the cheapest in town.
Lee said Yes also offered up to 30% rebate to power users who consume high amounts of data.
The saving starts at 2.5GB (gigabit). The more you use, the less you pay, he said, adding that for usage of 4GB and above, subscribers would get a 30% rebate for every GB used.
Yes subscribers will receive a rebate of RM9 for data usage of 2.5GB while usage of 3GB will get RM23 rebate.
The rebates will reduce Yes' rates to as low as two sen per MB or RM20 per GB while giving users the power to self-manage by setting temporary data caps.
YTL Comms and Samsung have also introduced the world's first all-4G mobile phone, Yes Buzz, which will be available next month.
The 4G network will be SIM-less with the 018 prefix.
YTL Comms chairman Tan Sri Francis Yeoh declined to give a specific target of pre-registered subscribers but said the numbers were healthy.
He said the response to the pre-registration had exceeded the group's expectations by three times.
Yeoh said the group was keen to cooperate with telecommunications service providers in China and other Asian countries to offer 4G services.
Prior to the launch, Yes 4G faced interconnectivity issues with other networks as it was unable to interconnect with the operators. However, the group managed to sign interconnectivity agreements with them yesterday.
We're now finally interconnected with everybody. We have received full cooperation (from other telcos), Seok Hong said, adding that other operators had welcomed them onboard.
At the launch, Muhyiddin spent five minutes on a video call with Malaysian students in London.
Also present were YTL Corp executive chairman Tan Sri Yeoh Tiong Lay; Information, Communications and Culture Minister Datuk Seri Utama Dr Rais Yatim; Tun Lim Kheng Yaik; and Datuk Seri Chua Soi Lek.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7468348&sec=business
Its Yes service will cover 80% of population by end-2011 from 65% now
KUALA LUMPUR: YTL Communications Sdn Bhd (YTL Comms) will roll out its 4G mobile Internet-with-voice service, Yes, to cover 80% of the population by end-2011.
YTL Comms, a unit of YTL Power International Bhd, currently has a coverage of 65%. To date, it has invested some RM2.5bil in the Yes 4G infrastructure.
We will extend to Sabah and Sarawak at the right time, executive director Datuk Yeoh Seok Hong told a briefing prior to the service launch by Deputy Prime Minister Tan Sri Muhyiddin Yassin yesterday.
Seok Hong said that with 1,500 base stations, the event marked the largest network ever launched in the country.
We still have 1,000 base stations to be deployed. By then, 80% of the population will be covered, he said.
Chief executive officer Wing K. Lee said Yes was the most affordable 4G mobile Internet-with-voice service in Malaysia.
He said its pay-as-you-go rate of nine sen for 3MB (megabit) data, one-minute call or one short-messaging service was the cheapest in town.
Lee said Yes also offered up to 30% rebate to power users who consume high amounts of data.
The saving starts at 2.5GB (gigabit). The more you use, the less you pay, he said, adding that for usage of 4GB and above, subscribers would get a 30% rebate for every GB used.
Yes subscribers will receive a rebate of RM9 for data usage of 2.5GB while usage of 3GB will get RM23 rebate.
The rebates will reduce Yes' rates to as low as two sen per MB or RM20 per GB while giving users the power to self-manage by setting temporary data caps.
YTL Comms and Samsung have also introduced the world's first all-4G mobile phone, Yes Buzz, which will be available next month.
The 4G network will be SIM-less with the 018 prefix.
YTL Comms chairman Tan Sri Francis Yeoh declined to give a specific target of pre-registered subscribers but said the numbers were healthy.
He said the response to the pre-registration had exceeded the group's expectations by three times.
Yeoh said the group was keen to cooperate with telecommunications service providers in China and other Asian countries to offer 4G services.
Prior to the launch, Yes 4G faced interconnectivity issues with other networks as it was unable to interconnect with the operators. However, the group managed to sign interconnectivity agreements with them yesterday.
We're now finally interconnected with everybody. We have received full cooperation (from other telcos), Seok Hong said, adding that other operators had welcomed them onboard.
At the launch, Muhyiddin spent five minutes on a video call with Malaysian students in London.
Also present were YTL Corp executive chairman Tan Sri Yeoh Tiong Lay; Information, Communications and Culture Minister Datuk Seri Utama Dr Rais Yatim; Tun Lim Kheng Yaik; and Datuk Seri Chua Soi Lek.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7468348&sec=business
Injecting life into Time dotCom
Saturday November 20, 2010
By RISEN JAYASEELAN
risen@thestar.com.my
IN October 2008, then 30-year-old Afzal Abdul Rahim (pic) emerged as a new shareholder and chief executive of the ailing Time dotCom Bhd (TdC). Afzal's entry into TdC was via his vehicle called Global Transit International Sdn Bhd (GTI) and the deal was structured this way: Khazanah Nasional Bhd would transfer 30% of its holdings in TdC into a special purpose vehicle (SPV) called Pulau Kapas Ventures Sdn Bhd (PKV) resulting in Khazanah getting 61.2% of PKV. GTI, in turn, injected its wholly-owned subsidiary Global Transit Communications Sdn Bhd (GTC) into the SPV, with GTI then being given the balance 38.8% of the PKV.
Now two years later, after having met milestones at TdC the company has shown five consecutive quarters of earnings and revenue growth he is set to gain control over TdC by injecting his prized assets into the company. Confident and chatty, Afzal, a mechanical engineering graduate from the University of Sussex, breezes through questions effortlessly, especially the tough ones about whether he is cashing out or injecting his assets at too high a price.
Excerpts:
Q: What is your reaction to the sell down of TdC shares a day after the deal was announced?
A: The sell-down is knee-jerk reaction by investors and is expected, given that it involves a capital reduction and consolidation of shares. However, to give perspective, many of the analysts and fund managers we have spoken to in the last three to four months, have suggested that we clean up the balance sheet and rationalise our shares in circulation, considering TdC seems to be sustainably profitable now. There is also the intent on our side to institutionalise our shareholding. In July this year, when we first started actively engaging investment analysts and fund managers, we only had less than 1% of institutional shareholders. Today, institutional shareholders make up about 10% of our shareholder base.
One view is that the capital reduction was ill-timed, in the sense that it should not have been coupled with a deal that was primarily aimed at enhancing shareholder value. What are your comments?
The capital reduction and consolidation is necessary to enhance shareholders value moving forward. For TdC to leapfrog in its end to end service and business offerings, it needs to acquire these assets. Furthermore, we wanted to acquire using TdC shares as currency in order to commit the vendors of the assets to TdC. TdC can't issue shares as its share price is below the par value of RM1. So there is really no way out but to do capital reduction and consolidation of shares for the eventual benefit of TdC.
Why such a small capital repayment? Why not sell more DiGi.Com Bhd shares and give a higher capital repayment?
We believe in this business and that we can generate earnings moving forward. But we have then to decide if we are a profit and dividend yielding company or a growth company. We've managed to turn the company around and profitability is growing. The dividends from DiGi.Com shares are now a core part of our earnings. If we sell DiGi.Com shares and return that money to shareholders, then we are denying our shareholders future earnings. Selling the DiGi.Com shares also indicates that we lack long-term confidence in our business.
So what are the long-term plans with the DiGi.Com shares?
We will do what's best for our shareholders. We're very happy with DiGi.Com's performance as a company. If we did decide to sell the DiGi.Com shares, we would have to think whether to return the money to shareholders or to invest it in our business. But right now we have a lot of confidence in our business. DiGi gives us a certain return from the dividends. If we were to invest it, we must ensure that we can get at least the same amount, if not more than those returns.
One contention of this deal is that some of the assets that you are injecting into TdC are being valued at very high prices. For example RM105mil for GTL, which is a loss-making company.
The valuations were jointly decided by TdC's advisors together with an independent financial advisor, Public Investment Bank, which was appointed by the two independent directors of TdC Ronnie Kok Lai Huat and Balasingham Namasiwayam. In addition, TdC's chairman Abdul Kadir Kassim is a firm believer in governance and due process. What this valuation shows is that there is upside if the acquisitions go through.
As an example, GTL owns 10% of the Unity cable system that was built at a cost of US$300mil and whose replacement cost is many times that. Furthermore, the biggest barrier to entry for submarine cables isn't just cost but to actually be invited to participate in the cable. Then there is the matter of putting a value on the capacity of the cable based on market prices for bandwidth. The Unity submarine cable was just completed in April 2010 and the company was only operational in April. The past two years' results reflect the phase of cable construction. The book value reflects only the historical construction cost of the asset while the value of the asset today lies in its market price of the cable bandwidth capacity and earnings potential. At a capacity of 480 Gbps being GTL's portion of the Unity cable, monthly wholesale lease prices currently at US$59,000 per 10 Gbps and an asset life of more than 10 years, GTL is a strategic asset that will provide the TdC with cost advantages and access to the regional wholesale market.
But is there going to be an over-capacity of submarine cables?
Not across the Trans-Pacific, I don't think so.
Can you and TdC actually monetise the submarine cable?
Unity was commissioned only in May and GTC has already sold 10% capacity of the initial 48Gbps.
Can you give us some colour on PKV and how you are increasing your stake there from 38.8% to 51%?
I have been working 18-hour days since 2000 to build these companies which are like my children. If I am going to inject these companies into TdC, I will want to have some control over them. I also have to put my money where my mouth is, and inject all my businesses into TdC at a valuation that is ascribed by the independent financial advisors. I am also activating a call option to pay Khazanah for more TdC shares. These companies are earning year-to-date around RM13mil. I am giving that away.
But these companies don't seem to have a long enough profit track record?
AIMs has been around since 1990. It has been profitable since 2000. The losses that you see were because we had gone into the Singapore market to build a data centre and had to pull out during the bad economic times in 2007, so there was an investment loss. Profits from operations have always been positive in AIMs.
What about this earn out structure that Khazanah has with you? When will your shareholding in PKV increase in accordance with this agreement?
The agreement between Khazanah and us is so onerous that we will only get our earn-out at the end of the three-year period, meaning end of next year. So even though we have exceeded our targets, the earn-out structure (whereby we will get more PKV shares due to our performance) will only kick in end-2011. We are now paying for more PKV shares via a call option.
So why didn't you wait until 2011 to get control over PKV and thereby the 30.04% block of TdC?
By then, it may be more expensive for TdC to buy these companies. For example, GTC's growth rates are stunning. These companies are growing at a higher rate than TdC. The longer we wait to do the deal, the more expensive it is going to get for TdC to buy these companies. There are also certain operational and business synergies that need to kick in now, for the whole group of companies to be competitive.
How would you describe the new TdC, post acquisitions?
This will allow TdC to entrench itself as a leading regional wholesale player with a specific emphasis on high availability data services addressing a much wider part of the value chain than we have ever offered before.
What did you actually do to extract more value out of TdC's fibre-optic network since becoming the companies' CEO?
Fibre is our key asset and will always remain that. All we did was to understand market demands and requirements and match that to where our infrastructure was present. We also simplified our technology and engineering aspects of our network and significantly increased utilisation across our nationwide fibre presence. So long as there continues to be a strong relationship between customer demand and the manner of which we deploy our network, we will continue to extract value from our fibre asset base. A prime example of this is how we managed to use the same cause of fibre to serve our mobile backhaul customers, high capacity enterprise and corporate clients as well as our high bandwidth home customers.
Some say that selling bandwidth alone is not interesting from an earnings perspective.
Realistically, selling bandwidth should and must be the main focus of any data-centric fixed-line provider. There are many global examples of companies which continue to churn out sustainable growth profits by staying focused on the bandwidth business. While it may sound sexy to diversify to address various buzzword and disruptive industries, doing so merely distracts from our objective of continuing to take part in the massive growth opportunity that the Internet and content lifestyle have to offer.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7465575&sec=business
By RISEN JAYASEELAN
risen@thestar.com.my
IN October 2008, then 30-year-old Afzal Abdul Rahim (pic) emerged as a new shareholder and chief executive of the ailing Time dotCom Bhd (TdC). Afzal's entry into TdC was via his vehicle called Global Transit International Sdn Bhd (GTI) and the deal was structured this way: Khazanah Nasional Bhd would transfer 30% of its holdings in TdC into a special purpose vehicle (SPV) called Pulau Kapas Ventures Sdn Bhd (PKV) resulting in Khazanah getting 61.2% of PKV. GTI, in turn, injected its wholly-owned subsidiary Global Transit Communications Sdn Bhd (GTC) into the SPV, with GTI then being given the balance 38.8% of the PKV.
Now two years later, after having met milestones at TdC the company has shown five consecutive quarters of earnings and revenue growth he is set to gain control over TdC by injecting his prized assets into the company. Confident and chatty, Afzal, a mechanical engineering graduate from the University of Sussex, breezes through questions effortlessly, especially the tough ones about whether he is cashing out or injecting his assets at too high a price.
Excerpts:
Q: What is your reaction to the sell down of TdC shares a day after the deal was announced?
A: The sell-down is knee-jerk reaction by investors and is expected, given that it involves a capital reduction and consolidation of shares. However, to give perspective, many of the analysts and fund managers we have spoken to in the last three to four months, have suggested that we clean up the balance sheet and rationalise our shares in circulation, considering TdC seems to be sustainably profitable now. There is also the intent on our side to institutionalise our shareholding. In July this year, when we first started actively engaging investment analysts and fund managers, we only had less than 1% of institutional shareholders. Today, institutional shareholders make up about 10% of our shareholder base.
One view is that the capital reduction was ill-timed, in the sense that it should not have been coupled with a deal that was primarily aimed at enhancing shareholder value. What are your comments?
The capital reduction and consolidation is necessary to enhance shareholders value moving forward. For TdC to leapfrog in its end to end service and business offerings, it needs to acquire these assets. Furthermore, we wanted to acquire using TdC shares as currency in order to commit the vendors of the assets to TdC. TdC can't issue shares as its share price is below the par value of RM1. So there is really no way out but to do capital reduction and consolidation of shares for the eventual benefit of TdC.
Why such a small capital repayment? Why not sell more DiGi.Com Bhd shares and give a higher capital repayment?
We believe in this business and that we can generate earnings moving forward. But we have then to decide if we are a profit and dividend yielding company or a growth company. We've managed to turn the company around and profitability is growing. The dividends from DiGi.Com shares are now a core part of our earnings. If we sell DiGi.Com shares and return that money to shareholders, then we are denying our shareholders future earnings. Selling the DiGi.Com shares also indicates that we lack long-term confidence in our business.
So what are the long-term plans with the DiGi.Com shares?
We will do what's best for our shareholders. We're very happy with DiGi.Com's performance as a company. If we did decide to sell the DiGi.Com shares, we would have to think whether to return the money to shareholders or to invest it in our business. But right now we have a lot of confidence in our business. DiGi gives us a certain return from the dividends. If we were to invest it, we must ensure that we can get at least the same amount, if not more than those returns.
One contention of this deal is that some of the assets that you are injecting into TdC are being valued at very high prices. For example RM105mil for GTL, which is a loss-making company.
The valuations were jointly decided by TdC's advisors together with an independent financial advisor, Public Investment Bank, which was appointed by the two independent directors of TdC Ronnie Kok Lai Huat and Balasingham Namasiwayam. In addition, TdC's chairman Abdul Kadir Kassim is a firm believer in governance and due process. What this valuation shows is that there is upside if the acquisitions go through.
As an example, GTL owns 10% of the Unity cable system that was built at a cost of US$300mil and whose replacement cost is many times that. Furthermore, the biggest barrier to entry for submarine cables isn't just cost but to actually be invited to participate in the cable. Then there is the matter of putting a value on the capacity of the cable based on market prices for bandwidth. The Unity submarine cable was just completed in April 2010 and the company was only operational in April. The past two years' results reflect the phase of cable construction. The book value reflects only the historical construction cost of the asset while the value of the asset today lies in its market price of the cable bandwidth capacity and earnings potential. At a capacity of 480 Gbps being GTL's portion of the Unity cable, monthly wholesale lease prices currently at US$59,000 per 10 Gbps and an asset life of more than 10 years, GTL is a strategic asset that will provide the TdC with cost advantages and access to the regional wholesale market.
But is there going to be an over-capacity of submarine cables?
Not across the Trans-Pacific, I don't think so.
Can you and TdC actually monetise the submarine cable?
Unity was commissioned only in May and GTC has already sold 10% capacity of the initial 48Gbps.
Can you give us some colour on PKV and how you are increasing your stake there from 38.8% to 51%?
I have been working 18-hour days since 2000 to build these companies which are like my children. If I am going to inject these companies into TdC, I will want to have some control over them. I also have to put my money where my mouth is, and inject all my businesses into TdC at a valuation that is ascribed by the independent financial advisors. I am also activating a call option to pay Khazanah for more TdC shares. These companies are earning year-to-date around RM13mil. I am giving that away.
But these companies don't seem to have a long enough profit track record?
AIMs has been around since 1990. It has been profitable since 2000. The losses that you see were because we had gone into the Singapore market to build a data centre and had to pull out during the bad economic times in 2007, so there was an investment loss. Profits from operations have always been positive in AIMs.
What about this earn out structure that Khazanah has with you? When will your shareholding in PKV increase in accordance with this agreement?
The agreement between Khazanah and us is so onerous that we will only get our earn-out at the end of the three-year period, meaning end of next year. So even though we have exceeded our targets, the earn-out structure (whereby we will get more PKV shares due to our performance) will only kick in end-2011. We are now paying for more PKV shares via a call option.
So why didn't you wait until 2011 to get control over PKV and thereby the 30.04% block of TdC?
By then, it may be more expensive for TdC to buy these companies. For example, GTC's growth rates are stunning. These companies are growing at a higher rate than TdC. The longer we wait to do the deal, the more expensive it is going to get for TdC to buy these companies. There are also certain operational and business synergies that need to kick in now, for the whole group of companies to be competitive.
How would you describe the new TdC, post acquisitions?
This will allow TdC to entrench itself as a leading regional wholesale player with a specific emphasis on high availability data services addressing a much wider part of the value chain than we have ever offered before.
What did you actually do to extract more value out of TdC's fibre-optic network since becoming the companies' CEO?
Fibre is our key asset and will always remain that. All we did was to understand market demands and requirements and match that to where our infrastructure was present. We also simplified our technology and engineering aspects of our network and significantly increased utilisation across our nationwide fibre presence. So long as there continues to be a strong relationship between customer demand and the manner of which we deploy our network, we will continue to extract value from our fibre asset base. A prime example of this is how we managed to use the same cause of fibre to serve our mobile backhaul customers, high capacity enterprise and corporate clients as well as our high bandwidth home customers.
Some say that selling bandwidth alone is not interesting from an earnings perspective.
Realistically, selling bandwidth should and must be the main focus of any data-centric fixed-line provider. There are many global examples of companies which continue to churn out sustainable growth profits by staying focused on the bandwidth business. While it may sound sexy to diversify to address various buzzword and disruptive industries, doing so merely distracts from our objective of continuing to take part in the massive growth opportunity that the Internet and content lifestyle have to offer.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/20/business/7465575&sec=business
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