Friday, November 20, 2009

The day has come.... Maxis Bhd debut on Bursa Malaysia

The first 5 minutes of Maxis Bhd's trading session was amazing. Its shares, opened at a 9.2 per cent premium at RM5.46, was as high as RM5.50 within the first 5-10 minutes.

However, selling pressure was overwhelming. It started to fall to as low as RM5.28 before recovering at the 5.35-5.40 level. At closing, it was at RM5.42. Not too bad for a day one.

Like most media, the publication (Business Times, NST) got the chance to interview Maxis ceo Sandip Das.

Below are some of the key points, or quotes:

1. Hints that company will return higher dividend to shareholders. Analysts are expecting the company to return more than 100 per cent of net profit as dividend.

"We will see a generation of more organic cashflow moving forward. After 2010, capex will start coming down a bit, because we have already invested for the next stage in a big way. So, the delta between the revenue and the net cash will only increase.

"So, organically, we will continue to have a strong cashflow. We also want to make sure at most of the time, we should have an ideal balance sheet, which means we can't be sitting on cash that we did not do anything about it. Either we reinvest it or we pump the money back to the shareholders."

2. On his view of being second, behind Celcom, in terms of the mobile broadband race. (as of first half, celcom has 420,000 customers, while maxis has about 142,000)

"It's still too early to declare leadership in this segment as there's still tremendous growth potential in mobile broadband. Clearly, we want to be the broadband leader."

3. Sandip also explained what went wrong in the first quarter this year, which saw its market share declined by 1-2 percentage points. He attributed it to two factors.

a. The unsuccessful "60-second block" call plan, which draw poor market response.
b. The modernisation of its network. When upgrading work is ongoing, at some point in time, the quality of service may be affected. Naturally, when that happens, customers will reject the services, asking for refunds. So, Maxis for a while, had "freezed" its sales of mobile broadband.

He also said:

"Companies get bruised once in a while, but champions are companies that come back from such situation."

"We are now ready. We have a daily pass, a weekly pass as well as a monthly pass; it's packages for all segments. Of course, we are seeing our sales going up as well."

4. On the importance of broadband experience.

"I can stand in the middle of the street and sell 500,000 mobile broadband packs in one day. But it is pointless if the customer experience is not there."



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