Saturday, August 29, 2009

Axiata's Q2

ON AUGUST 27, Axiata Group Bhd, a mobile telecoms group, said second quarter net profit jumped 44 per cent from a year ago, driven by foreign exchange gains and a better showing by its units, especially Celcom.

The net profit of RM526.84 million is also its best quarterly performance since its listing a year ago.

Axiata, which has more than 100 million customers spread over seven countries, also thinks it can almost meet its main financial targets for this year.

It aims to grow revenue by 6-11 per cent and operating profit or Ebitda by 4-6 per cent, among others.Ebitda, or earnings before interest, tax, depreciation and amortisation, rose 2 per cent to RM1.24 billion from a year ago.

Its revenue rose by 7.8 per cent to RM3.16 billion during the period, against RM2.93 billion last year."We have many reasons to smile. All key operating companies improved quarter-on-quarter," said president and group chief executive officer Datuk Seri Jamaludin Ibrahim in a briefing in Kuala Lumpur.

It does not plan to buy Luxembourg-based telecom operator Millicom's assets in Cambodia and Sri Lanka. However, it remains open to acquisitions.

"In general, we are quite open to looking at industry consolidation. Cambodia is definitely one of them, given the number of competitors there. But, until we have a good candidate, we will proceed as it is (to grow organically)," said Jamaludin.

The company is also in active talks on the sale of non-core assets in Thailand, Pakistan and Iran although it is not in a rush to do so.For the six-month period, the group's revenue rose 7 per cent to RM6.03 billion, while net profit fell by 23 per cent to RM591 million.

Celcom, which made up half of Axiata's revenue and over half of Axiata's operating profit, also posted one of its best quarters.

"I think Celcom's segmentation approach, as well as its aggressive push for mobile broadband, are showing effects," said an analyst from a local research house.

Although currency swings are less volatile these days, Axiata said it has plans to minimise this and an announcement is expected in the near term.Meanwhile, the company said it expects the merger between Idea and Spice in India to be completed this quarter.

TM announces Q2, to spend RM350 on IPTV contents

ON AUGUST 21, Telekom Malaysia Bhd, the country's dominant fixed-line operator, said second-quarter net profit more than doubled due tohigher unrealised exchange gain on foreign currency borrowings of RM123.2million.

The company posted a net profit of RM266 million, up from RM114.7 million (which excluded results from the demerged Axiata Group Bhd) in the same period a year earlier.

The company also added that it plans to spend RM350 million on IPTV contents over the next 3-4 years. Sounds a lot? Think again.

RM350 million over 3-4 years would represent an annual expenditure of about RM117 million a year over a three-year period or RM87 million over a four-year period. In comparision, Astro spends more than RM800 million on contents in FY2009 alone. In FY2008, it spends more than RM700 million on contents.

Does this means that TM's IPTV content will not be competitive? Not necessary. Spending less on contents will translate to higher possibilities of TM tieing up with media owners. It does not need to buy the contents (such as rights for football games). Instead, it can tie up with companies like Media Prima (which has TV3, NTV7, 8TV, etc under its belt) or Astro -- allowing Media Prima viewers or Astro viewers to watch their programmes via IPTV platform, instead of conventional platform.

Imagine, if Astro and TM tied up, allowing users to watch Astro programmes via IPTV ... This could mean that viewers can watch their favorite programmes even when it's raining.

Below are some of the financial highlights:

1. Q2 revenue grew 1.1 per cent (quarter-on-quarter) and 0.9 per cent (year-on-year) to RM2.13 billion.

2. Net profit grew over 800 per cent (quarter-on-quarter) to RM266 million. Q109 revenue: RM27.7 million.

3. Broadband customer grew by 37,000 in Q2.

4. Fixed-line customers, which was declining for more than four consecutive quarters, grew by 0.7 per cent QoQ.

5. ARPU for its business phone lines and Streamyx grew from RM74 and RM87 in Q109 to RM78 and RM88 respectively in Q2.

Finally... Tune Talk is launched.

ON AUGUST 19, Tune Talk Sdn Bhd - a Tune Group company - launched its much-anticipated no-frills mobile services.
The launch was held in a hangar in Sepang, at about 3.30pm. I must say, the place is HUGE. As you enter the hall, you have the press registration counter on the right and on the left, you can sign up for a Tune Talk number.
There could be easily 200 people attending the event. Most of the media representatives were there, there were bloggers too (although i cant identify most of them), there were many Celcom staff there as well. Also attended the event include Tune Hotel CEO Mark Lankester and Green Packet's CEO Puan Chan Cheong.
Highlights of the launch:
1. Speech by Jason Lo (CEO of Tune Talk). I must say, it's one of the longest speech i ever heard.
2. Datuk Seri Tony Fernandes giving his speech on the wing of his new Airbus.
The mobile services - which uses the 010 prefix as well as riding on Celcom (Malaysia) Bhd's network - has a few main key differentiators:

1. Call rates of 22 sen a minute. To anyone, anywhere and anytime within Malaysia. That's at least 30 per cent cheaper than the basic rates offered by most mobile operators. (basic rates exclude those Friends and Family rates)

2. Its IDD rates are about 10 per cent cheaper than most operators', it claimed. Will look into their IDD offering soon.

3. Tune Talkers may receive up to RM1 million worth of AirAsia e-gift vouchers. The vouchers will be given to the daily top 10 callers. (promotion lasts for 12 months)

4. Personal accident insurance coverage of RM100,000. (Hmmm... does it mean, im covered if i got into a car accident while talking on the mobile phone?)

However, the company does not plan to offer 3G services anytime soon. This means, Tune Talk is really focusing on offering basic services to customers. I believe the "lack of 3G" will not be a huge hurdle for Tune Talk -- because it is offering prepaid services, and let's get real, how many prepaid users (using 3G sim card) will use the 3G services (such as Internet browsing and video calls) on a regular basis?

I am sure the company and Celcom, which owns 35 per cent stake in Tune Talk, have done sufficient research before embarking on such plan.

No doubt. The 22 sen a minute offering will get people excited. The main question now is, how will DiGi and Maxis react?

Below are some of the key takeaways from the press conference:

1. To sign-up 1 million subscribers within a year.

2. To be cashflow positive within six months.

3. To secure another MVNO partnership in another Southeast Asia country within 12 months.

4. Capex of RM40 million for the next five years.

Thursday, August 13, 2009

DiGi's unlimited offer...

WAS quite impressed with DiGi's latest offering, that is by offering unlimited music download for a small fee.

Now, for just RM5 a month, DiGi users can all the music they want, be it 1,000 songs, be it 10,000 songs, as long as you have the space.

The service is available for both prepaid and postpaid DiGi users.

During the press conference, the company was tight-lipped on its business model or revenue sharing arrangement with the recording companies. In the past, the model should be pretty straight forward, each song a customer downloads, DiGi and record labels will get a portion of the revenue.

Now, by allowing users unlimited download for RM5, how are they going to split the money?

My gut feel is, they will share the revenue for the downloads of "DRM-Free songs", DRM-Free songs are songs that can be transferred to third party. (A DRM format type of songs are not transferable, something like those songs you transferred to your iPods, you cant transfer the songs from the ipod to your laptop)

DiGi is offering users up to 5 DRM-Free songs a month. This means, they can download say, 1000 DRM songs, and 5 DRM-free songs.

Since DRM songs are not transferable, i guess the recording labels are not really at a huge lost even if the users download its entire library of DRM songs.

So, technically, users are paying RM5 for 5 DRM-free songs, and revenue sharing only happens when a DRM-free song is downloaded.

For additional info:


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