Farewell Steve Jobs

He changed the way.....and here is that quote that makes you wonder a million things...

It was the iPhone in 2007 that cemented his legacy in the annals of modern technology history.
Two years before the gadget that forever transformed the way people around the world access and use the Internet, Jobs talked about how a sense of his mortality was a major driver behind that vision.

''Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life,'' Jobs said during a Stanford commencement ceremony in 2005.
''Because almost everything - all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important.''
''Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.'' - Reuters


(First published in Reuters on October 6, 2011)

Free seats from AIRASIA

Here were go again, AirAsia and its free seat campaign.

"AirAsia, the world's best low cost airline for three consecutive years, is once again giving away *free seats to selected domestic and international destinations such as Langkawi, Banda Aceh (Indonesia), Hat Yai (Thailand) and Singapore, and many other exhilarating destinations at very low fares.
The ‘FREE SEATS’ booking period starts at 12am (+8GMT) on 21 – 25 September 2011 for the travel period from 3 May - 27 October 2012.
Log on to www.airasia.com to find out more. To avoid the expected high traffic due to the promotion, guests who wish to travel before 1 January 2012 can click at the link provided on the main webpage in order to conduct their transactions smoothly,'' a statement issued by the company said.

IATA revises 2011 profit forecast and warns of tough times in 2012

The International Air Transport Association (IATA) has revised its industry profit expectations to US$6.9 billion, up from US$4.0billion it predicted in June for the year. 

In a statement it said "As emphasized that, despite the improvements, profitability at these levels is still exceptionally weak (1.2% net margin) considering the industry’s total revenues of US$594 billion.''

In its first look at 2012, IATA is projecting profits to fall to US$4.9 billion on revenues of US$632 billion for a net margin of just 0.8%.

“Airlines are going to make a little more money in 2011 than we thought. That is good news. Given the strong headwinds of high oil prices and economic uncertainty, remaining in the black is a great achievement,” said Tony Tyler, IATA’s Director General and CEO.

“But we should keep the improvement in perspective. The US$2.9 billion bottom line improvement is equal to about a half a percent of revenue. And the margin is a paltry 1.2%. Airlines are competing in a very tough environment. And 2012 will be even more difficult,” said Tyler.

IATA’s forecast is built around global projected GDP growth of 2.5% in 2011 falling to 2.4% in 2012. Airline financial performance is closely linked to the health of world economies. Whenever GDP growth has slowed below 2.0% the airline industry has lost money. “We will be perilously close to that level at least through 2012. The industry is brittle. Any shock has the potential to put us in the red,” said Tyler.

MORE AIRCRAFT ORDERS EXPECTED

Global airlines will buy US$3.5 trillion of aircraft

LONDON: Global airlines will buy US$3.5 trillion of aircraft over the next 20 years to meet relentless demand for travel to and from Asia's burgeoning “mega-cities” and renew ageing fleets in the West, according to Airbus.
The world's largest civil jet maker raised its forecast for airplane deliveries over the next 20 years by around 8% to 27,800 aircraft as part of an annual market survey. The figure includes 900 freighters to keep up with a projected expansion in global trade.
The European company shrugged off turmoil in financial markets, saying population growth and urbanisation would continue to promote strong aviation demand. The industry has recovered more quickly than expected from the last recession but some are nervous over the short-term outlook.
“People need and want to fly more than ever before,” Airbus said in a statement.
“Over the next 20 years the aviation sector is expected to remain as resilient to cyclical economic conditions as in the past.”
Revenue passenger kilometres the number of people boarding planes adjusted for the distance flown would grow by an average 4.8% per year, which is equivalent to traffic more than doubling in the next 20 years, Airbus said.
Boeing is even more optimistic, with a recent forecast of 5.1% a year.
The predictions underscore soaring demand for narrow-body or single-aisle jets like the Boeing 737 and Airbus A320, the backbone of many airlines.
Both plane makers have decided to refresh their best-selling models with new engines to cut fuel costs and see off newcomers such as Canada's Bombardier or builders in China and Russia.
Airbus raised its demand forecast for these 100-200 seat aircraft by 7% to 19,200 airplanes worth US$1.4 trillion between 2011 and 2030. Boeing sees a market worth US$2 trillion, though its data includes airplanes from 90 seats upwards instead of 100.
Airbus and Boeing are increasing production rates to keep up with demand.
There is concern, however, over what the plane makers' optimism means for airlines on the eve of a widely-watched airline industry profit forecast from lobby group International Air Transport Associa-tion.
The association halved its forecast for 2011 airline profits in June and could trim it again in the light of Europe's debt crisis and fears of a new US recession.
Premium travel is where airlines make most of their profits and is seen as a sensitive guide to business confidence.
Many airlines are investing in new lightweight airplanes to lower their fuel costs.
Airbus sees strong demand for wide-bodied twin-jets like the Boeing 787 Dreamliner, which is due to be delivered to its first Japanese customer next week after three years of delays, and smaller versions of its own A350. Airbus hiked its forecast for 250-300 seat jets by 11%.
The Airbus survey also acts as a signpost to the next big battle with Boeing over the future of mini-jumbos like the Boeing 777, which Airbus has countered with its planned A350-1000.
Boeing must decide in the next year or so whether to redesign the 777 or just commission a replacement for the world's largest civil jet engines as it tries to keep its dominance of the 350-400 seat market. Airbus sees demand for 2,100 new aircraft in this category over the next 20 years.
However, Airbus and Boeing continue to disagree on the demand for the industry's behemoths the Airbus A380, the world's largest airliner, with 525 seats, and Boeing's newly-revamped 747 jumbo.
Airbus sees a US$600bil market for airplanes with 400 seats or more, representing 1,781 units. Boeing sees demand for less than half that, just 820 planes - Reuters

(First published in The Star on Sept 20. 2011)

More jobs for air sector

Boeing Forecasts Strong Need for Aviation Personnel in Asia Pacific

Source: Boeing

19/09/2011

Boeing (NYSE: BA) forecasts the Asia Pacific region will require hundreds of thousands of new commercial airline pilots and technicians over the next 20 years to support airline fleet modernization and the rapid growth of air travel.
The 2011 Boeing Pilot & Technician Outlook calls for 182,300 new pilots and 247,400 new technicians in the Asia Pacific region through 2030. The greatest need is in China, which will require 72,700 pilots and 108,300 technicians over the next 20 years.
"The demand for aviation personnel is evident today. In Asia we're already beginning to see some delays and operational disruptions due to a shortage of pilots," said Roei Ganzarski, chief customer officer, Boeing Flight Services. "To ensure the success of our industry as travel demands grows, it is critical that we continue to foster a talent pipeline of capable and well-trained aviation personnel."
North East Asia will need 20,800 pilots and 30,200 technicians over the next 20 years. South East Asia will require 47,100 pilots and 60,600 technicians. The Oceania region will need 13,600 pilots and 15,600 technicians and South West Asia will need 28,100 pilots and 32,700 technicians.
"As an industry we must make a concentrated effort to get younger generations excited about careers in aviation. We are competing for talent with alluring hi-tech companies and we need to do a better job showcasing our industry as a global, technological, multi-faceted environment where individuals from all backgrounds and disciplines can make a significant impact," Ganzarski added.
More information on the 2011 Pilot & Technician Outlook is available at http://www.boeing.com/commercial/cmo/pilot_technician_outlook.html.

First published in Air Transport News on Sept 19, 2011)

Pay, just to check in?????

That's true.

From Sept 21, all travellers on AirAsia will be subject to RM10 check in fee if they fail to check in online or via their smartphones.

Another way to raise ancillary income.

Their statement reads:

"AirAsia will continue to provide limited conventional check-in counters at all airports where it operates. However, a check-in fee of RM10 per guest will apply for all flights which bookings are made from 21 September 2011 onwards. The check-in fee is not applicable for bookings made before 21 September 2011.

  

In the rise of escalating jet fuel prices, AirAsia strives to counter the effects by aggressively growing revenue through ancillary income and services, instead of transferring the full cost of the hike to its guests. Hence, check-in at the counter will be an additional service and an ancillary fee will apply.

This fee will apply for all AirAsia (AK) domestic and international flights originating from airports in Malaysia. As for AirAsia X (D7), counter check-in charges will apply for flights departing from the airline’s base in Kuala Lumpur and at all airports where the airline operates except in Tokyo (Haneda) & Osaka (Kansai) in Japan, Seoul (Incheon) in Korea and Tehran (Iran).''

How much can they raise from this????

MAHB next???

Should there be a change when the present management has delivered in terms of passenger numbers, financials and also number of airlines operating at KLIA?

any thoughts?

CEO needs to know - Who is the master, passengers or his bosses?

My bet is the passengers, without which there can be no money. Take care of your customers.

MAS needs a CEO/MD with the guts to set things right

“IF you want to make peace with your enemy, you have to work with your enemy. Then he becomes your partner.”
That is Nelson Mandela's quote and it aptly describes Tan Sri Tony Fernandes who was once a critic of Malaysia Airlines (MAS). Fernandes and Datuk Kamarudin Meranun bought a 20.5% stake in MAS and both of them have now become directors of the national carrier.
For nearly a decade, he has been lambasting MAS for his airline's - AirAsia - failure to get the right routes among many other issues. Things had not been going well at MAS and it needed to be salvaged.
Tuesday marked an important milestone for both the airlines as the demarcation lines were drawn very clearly.
And for the umpteenth time MAS will undergo a restructuring, turnaround or transformation to get it back on course.
The ultimatum is for MAS to regain its lost glory and that means being only a premium full-service airline.
That is going to be tough when its competitors are already so far ahead.
Execution will be key to making that dream of the airline's shareholders come true.
Fernandes and Kamarudin are the best man for the job, but they will not dabble in the the day-to-day operation of the airline.
So the search for CEO/MD is on.
The person should possess Fernandes' magic touch, Kamarudin's finance acumen and the wisdom of MAS chairman Tan Sri Md Nor Yusof.
Fernandes said he preferred someone who was “numbers-driven like AirAsia X's CEO Azran Osman-Rani, someone with a clear focus, possibly not someone from the airline industry, humble yet analytical, understands the basics of marketing and has a strong head for communications.”
Those who had endured the pain of holding MAS shares for nearly a decade now have their own wish list too. MAS shares, which are at a nine-year low, closed at RM1.80 yesterday.
The person should be ambitious, not just for himself but the airline, someone who sees the big picture, a leader with guts to hire and fire, cut and stop the bleeding, brave enough to end procurement contracts that are at expense of the airline. The candidate should not be distracted just because other airlines dumped fares. He or she has to rebuild the airline, staff morale, shareholder value but the biggest challenge is handling the perception issue. That is why the person needs to be the best communicator and best salesperson. The person has to be mindful of cultural issues and who his or her masters are the passengers or the bosses?
And don't fumble on the front-end passenger seats issue again as the travellers know whether the seats they have bought are really flat for their comfort or otherwise. Get it right once and for all if MAS aspirations are to be a premier airline like Singapore Airlines and Emirates.
The person should eat, breath, think of yields, that's the hallmark to profitability, as without that no number of passengers, connectivity, frequency and comfort can bring in the profits that the airline desperately needs. We are talking about a premium brandnot a mixed bag of premium-to-mid and low-cost.
Throw the dice, take your pick.

An executor who can perform his job with gusto is what MAS needs. If those in power really want the problem at MAS to be resolved once and for all, they should warm up to the idea of even hiring a foreigner, not necessarily a mat salleh. But certainly not someone who is into a quick fix and short-term gains.

Deputy news editor B.K. Sidhu says saving MAS is inevitable but she is drawn to a quote made a long time ago by someone powerful that reads: “I don't care if SIA goes down, but Changi should not, at all cost”.

This article was first published in The Star on August 12, 2011

MAS and AirAsia alliance

The alliance is sealed, expect the colloboration to take place from November onwards so the synergies and benefits will start to show in 2012.

whether you will pay more or less for your next travel will depend on how this whole alliance works.

Will there really be competition?

Malaysia Airlines and AirAsia Bhd will have common directors in Tan Sri Tony Fernandes and Datuk Kamarudin Meranun sitting on MAS board. Datuk Azman Yahya (a director in MAS) and Mohd Rashdan (executive director of MAS) will sit on AirAsia board.

This is a result of a share swap deal where Fernandes and Kamarudin's vehicle Tune Air ends with a 20.5% stake in MAS and Khazanah Nasional Bhd (MAS parent) takes 10% in AirAsia. The deal will change the landscape of the local aviation industry. It virtually takes the element of low cost fares away from MAS.

Food for thought:

Is the deal good for travellers, will fares get lower or will all this curtail competition?

Btw, the pretty Datuk Rohana Rozhan, the CEO of Astro Malaysia is now MAS board member.

And to Tengku Datuk Azmil Zahruddin, you are a good man...all the best to you.

AirAsia and MAS colloboration

The press conference by Khazanah Nasional, AirAsia and Malaysia Airlines at 3.30 pm today in KL

It has been under wraps for a long time and now it is in the open,expect more details on Tuesday.

Those in the know claim it will be very "promising,'' but once again there is an effort to put MAS back on its feet. Why is it always falling after a restructuring, transformation, etc, are all these exercises addressing the real issue the airline faces or just facets of it?

Has some actually cleaned up the procurement side?

How many "bailouts of sorts" do we need to get MAS rising again?

Hope this is the last and hope it does not create a cartel or else we may just have to pay RM820 for a return flight to Singapore.

Get the talent from within to lead.

Also read how critical Ganesh is http://www.sahathevan.blogspot.com/

Are providers bothered about user's grouses?

WHO would have thought there are really some very angry mobile phone users out there?
I was inundated with SMSes and emails from contacts and readers of The Star who read this column last week on dropped calls.

All the emails and SMS from readers have one thing in common - how frustrated they are over dropped calls, failed calls and distortion in voice. This has been going on for nearly two years.

Of the many emails received, one sender, Wang, said “while chatting with my father in Sabah I experienced three dropped calls. Naively, we thought it was his handset problem but actually it is dropped calls.''

For Kumar, dropped calls were a normal thing, but “when I looked at the bills, I would have three or four charges for calls for which I could not get through. Only in this country the consumers are secondary and the providers are the kings. People just don't mind the extra charges (but don't) capitalise on that.''

A senior editor says he faces dropped calls every day and it is really “frustrating.''

Ho said he noticed that his bills had “many calls made in less than five or eight seconds, and are probably due to the call problems ... providers are making substantial gains by charging the customers for the dropped calls.''

Indraveni is frustrated, she wants to change her service provider but has to wait until June. Dan questions if celcos are even providing the necessary network service for users “or (that they) only give priority to those who subscribe for the highest value.''

Soh wants the bad hats in the industry named. His belief is that if you name the party it will force the providers to buck up or they risk users leaving their network.

Tan demands that the regulator do something about dropped/failed calls. In his email he opined that the “MCMC should look at service level agreements. There should be no charge to consumers (for dropped calls) and users should be compensated for services below (par). MCMC, show your authority and take action against unethical providers.''

Ahmad calls for a petition to the MCMC on dropped calls. But who is going to take action against “unethical providers?''

Is it the users, the MCMC, or consumer groups? The issue of dropped calls is an old one. But its recurrence shows that no serious effort has been undertaken to tackle it, so what are the blockages and have the authorities done enough?

The readers will glorify the celcos if the service is good and while they may represent a drop in the ocean of the 30 over million users, they are still users and their voice should be heard.

Dropped calls may be a global issue and in the US recently, the result of a survey on dropped calls was made public because the regulator is vigilant. In South Korea and Singapore, the operators will be fined if the quality of service (QoS) drops to a certain level.

In Britain, the regulator, Ofcom, takes the operators to task and dictates the pricing for services there.

Here, the regulator has in the past done many surveys on customer service but that has been a while.

The last time it commissioned a survey was a handphone survey which was supposed to have ended in December 2010.

An engineer says the regulator does verify the network quality but unfortunately it is not done as frequently as subscribers would want it to be. I think they conduct verifications once every few months.

What can be done to improve the situation of dropped and failed calls?

To reduce or avoid dropped calls, there needs to be total redundancy right from the base station till the core network and that involves more investments; will the celcos invest more at a time when data is growing while voice traffic is coming down. Change the charging to one second block for postpaid and prepaid from 30-60 seconds now.

There should be open scrutiny of an operator's performance in the media for users to decide which operator they want to stick to; this will force improvements in QoS.

The suggestions are there but one thing that we, as users, cannot seem to understand is why are the operators not sensitive to the plight of their users, or are they just concerned about their margins. By right the providers should bend forward and backward to serve their users. More so since they earn the highest margins in Ebitda globally.

So will the situation change any time soon or do users have to take up ad space to tell providers and the regulator of their frustrations?

Deputy news editor B.K. Sidhu believes it's time to switch. She welcomes feedback on QoS, email: bksidhu@thestar.com.my
First published in The Star on April 8, 2011

Do we need to pay for dropped calls?

AT 3am someone was chatting away until her call was rudely disconnected. She re-dialled, talked for a while and again, the scissors was at work. It happened three times within the hour.

She knew it was not the MACC, Bukit Aman or MCMC.

Nobody was eavesdropping, the network just failed on her.

Her frustrations can be understood and the receiver's irritation understandable. After the third disruption, who has the mood to continue talking?

The irony of it all is that the network failed on her in the wee hours of the morning when it was a non-peak hour. Why?

“Perhaps their engineers are too stressed at work, they need to go for a holiday before they drop permanently on the ground,” quipped someone.

Were she not on any plan with her service provider she would have switched operator as she had been facing this dropped call issue for sometime now.

But she is not the only one facing this dilemma. There are so many frustrated users out there and it is not just one network; two big networks are causing all the heartbreaks. It is also not just dropped calls, but failed calls on the first attempt, static or interference, and voice distortions, which make you sound like a gorilla on the cellular phone.

Dropped calls occur when the handover from one cell to another is not clean, so to say. And failed calls are a failure of the call made due to traffic congestion.

For every call there is a specific time block, say 30 seconds or 60 seconds, and every time the call suddenly goes offline in the middle of a call means that you are paying for the full block.

And if you have to re-dail, that is considered another call, like two calls in less than 30 seconds but charged for two 30-second calls.

The consumer loses when his calls are suddenly cut off and the providers gain. It is a known fact that dropped calls are the easiest way to make money for the operators and this gain by the operators have gone unnoticed in many countries as users are unaware of the implications of dropped calls and the authorities are not taking the operators to task.

Malaysia has had cellular phone services for nearly two decades now and this problem continues to exist; in fact, it has been a roller coaster ride for users for basic voice calls.

While we understand that voice traffic is on the downhill and data is slowly becoming “king,” it does not mean that people who talk should face these disruptions so frequently.

This makes us wonder if the service providers are really investing to ensure there is enough capacity for all the new additions they get every month, and are they building and compromising voice.

If operators cannot get this basic service right with 3G and WiMAX, then we ought to revisit the priorities for 4G, LTE.

If this were to occur in South Korea, the providers would be in trouble as the regulator acts on every single complaint from users simply because they take service quality issues very seriously.

Here you wonder if anyone frequently checks on the quality of cellular service any more.

And often you hear operators talking about enhancing customer experience,' I really think they ought to look at this very seriously as if our voice calls go offline suddenly, what customer experience are they talking about? This is bad customer experience.

The question is how long more do we have to contend with dropped calls and still pay for them. Shouldn't the operators be transparent about this and tell us that we have experienced dropped calls and refund us?

Perhaps we should go through the provider's dropped call policy to get reimbursed for lost minutes. The easier alternative is to switch networks or port to those providers that are willing to refund. Waiting for rules on dropped calls to come out may take forever.

Deputy news editor B.K. Sidhu invites feedback on customer's experience on dropped and failed calls and voice distortions. Please email bksidhu@thestar.com.my

First published in The Star on Friday April 1, 2011

Can we prevent another international bribery scandal?

ALCATEL-LUCENT has been blacklisted for 12 months.

Axiata Group and Telekom Malaysia Bhd (TM) will avoid dealing with them till early next year. This ban affects both the international company, Alcatel-Lucent SA, and the Malaysian operations, Alcatel-Lucent Malaysia Sdn Bhd.

Alcatel has a big office at Wisma Denmark, Kuala Lumpur, and a pool of engineers, some of whom are expatriates. Internally, they must be counting their lucky stars that it is only 12 months, not 12 years, or else they may have to pack and return to France.

Other vendors who find Alcatel a challenger must be rejoicing as it is one vendor out of the race at a time when telcos/celcos are preparing for the next-generation network awards.

To recap, two days after Christmas last year, the international bribery scandal involving Alcatel broke out. The French giant, to avoid prosecution, decided to pay US$137mil to settle US charges that it paid millions of dollars in bribes to foreign officials to win and maintain contracts in Costa Rica, Hondurus, Taiwan and Malaysia.

The documents released by the US Department of Justice and Securities Exchange Commission (SEC) stated that Alcatel paid improper payments to secure contracts with Celcom Axiata Bhd, a unit of Axiata Bhd. Then, Celcom was a unit of TM and it awarded a telecoms contract to Alcatel that ended in 2009. The bribes totalled US$700,000 and were paid between 2004 and 2006 to consultant A and B. No details are available as to who these consultants are but purportedly said to be TM employees. They got paid off for supplying information on competitor's pricing.
After the scandal broke out, Malaysian Anti-Corruption Commission (MACC) had to jump in to investigate and the agency literally housed itself in TM and Alcatel for several days to weeks, interviewing dozens of people and fine-combed tonnes of documents to nab the culprit. At the same time, TM and Axiata conducted their own internal investigations.
In all these investigations, it would be good to see if there was any potential conflict of interest.
This week, MACC suggested that vendors who pay bribes be blacklisted and both TM and Axiata jumped in to blacklist the French company.
But the story does not end here.
The giver has been punished and the question on many people's lips is if any evidence has been unearthed to nab the takers those who took or shared the US$700,000. Will they be brought to the book or will this be hushed-up and some people get away scot-free? The names of the consultants are awaited by some with abated breadth.
For one, MACC has not finished its investigations and may announce more details next week or the coming weeks. The men are still at work and we just need to be patient.
Punishing Alcatel and making sure it does not have new business for a year or so can be bad for the company, but will it deter others and prevent a similar episode?
In Alcatel's case, it had to swallow the bitter pill for what it did. Why this bribery case happened is because there is a precedent set in the industry. It is a global thing in the world of telecoms some expect, some like to give, some ask.
Can it be prevented in the future?
A vendor representative says there is a need for greater transparency at all levels of the tender process from the technical evaluations right up to the commercial bidding and if no one takes, no one will give.
Another said: “To stop the spiral of cronyism and corruption and not let things build up until there are ugly consequences for our leaders, the Government and the nation, we need to call for open and transparent tender processes for all procurement for government-linked companies and government departments and agencies.''

Talk is cheap but execution is tough. However, if we are serious, then we have to prevent abuse and curb corruption at every step of the way. And if we need to learn from others, we should, as we can easily borrow some of SEC's books and force a rigorous audit process. That will get us somewhere or we can just sit down and do damage control every time it happens. The choice is really in our hands.

Deputy news editor B.K. Sidhu wonders why dropped and failed calls have become so rampant these days.

First published in The Star on March 25, 2011

Celcom and iPhones

Celcom confirmed today that it would sell iPhones in the coming months, beginning with iPhone 4.
It should not have waited this long in the first place though it is the known in the market for selling its Blackberry series. In this market you need variety and the iPhone series is in demand.

With two months away for the iPhone 5 launch, will Celcom get to distribute iPhone 5 as well? If not, then it will be lagging behind Maxis and DiGi again even though it gets into the iPhone distribution game.

Maxis claim it sold thousands of iPhones and DiGi seems to have an attractive RM58 a month package.

Hopefully Celcom is able to outdo the two with a better package that does not burden users with a 12 or 24 month contract.

Afzal's phone is just buzzing, people want to know where is the thosai shop in Barcelona

Afzal needs better arsenal to fight the fibre-optic war

IN four days Afzal Abdul Rahim covered all the booths that he could find in six halls at the recently concluded Mobile World Congress (MWC).

You may wonder what was the head honco of a fixed line company doing at a mobile congress?

Spying, would be the obvious answer.

Others from the fixed world were also there but he stopped at every booth, found out what he wanted before moving to the next. This is the congress where geeks, vendors and techo guys meet every year to craft the future of the industry.

It is also a showcase of future technology, applications and devices. MWC is also the base where jobs are negotiated as a lot of CVs are circulated.

I guess he had to pay for excess baggage for carrying nearly 20 kilos of brochures he brought back. But knowing him, and his witty self, he may have gotten across for free.

And after getting around through the halls he had time to find some Indian restaurants for thosai and tandoori.

I am talking about Barcelona and he is the CEO of  Time dotCom Bhd (TDC). This man can't resist mamak, Indian food and teh tarik.

He was there to find out what the future trends were so that TDC could arm itself to tap the areas of opportunities.

From the congress it is clear that data rules, and voice is down.

Data is growing and will grow at a faster pace as more people become comfortable with socialising, buying, selling and doing transactions online.

Since fibre can carry a lot more data, it will play a bigger role going forward and that is why the two bigger celcos are already working closely with Telekom Malaysia Bhd (TM).

To recap, TDC was a company with big ambitions, big plans, but nothing materialised. It was bleeding for years since its listing in 2001 and many people lost a lot of money investing in this stock.

Its balance sheet had been flawed with red ink and in 2007 it reported RM160mil net loss. Afzal joins the group in late 2008.

Today TDC is a different creature.

From merely owning fibre, TDC has shaped up to have a data centre, a global IPT network, an equity in the Trans Pacific Cable System - running from Singapore to Japan and onto the United States in which Google is also a partner. It now carries some traffic from Thailand to Malaysia and onto the US.

It is carrying digital TV content for Astro and has 30,000 buildings wired up. It is fiberalising DiGi's network.

After Barcelona he sprang a surprised - TDC delivered triple growth in net profit to RM107mil for FY10. Revenue was up 27% - percentages never heard of previously - to RM317mil.

All this was led by higher contributions from data, particularly wholesale and global bandwidth segment. But its market share is only a meagre 5%, incumbent TM has the rest.

He is tough and results-orientated and wants the market share to rise to 10% and his aim is for TDC to be a regional wholesale player. This is another big ambition!

It will be tough as he is up against TM, and also the mobile boys, which are beefing up operations to ride the big data boom and they are all out for the same small and medium enterprises and corporate market.

TDC also has its share of problems. Deployment is its biggest issue, bureaucracy a hurdle, it is a capital intensive business and there is no common utility planning.

It is also not on analyst radar screens and by market capitalisation it is no where near TM, whose market cap is seven times bigger than that of TDC. It is RM14.2bil versus RM1.92bil.

Afzal is the 14th CEO of TDC. Perhaps TDC has finally gotten its acts right.

And no doubt Afzal has delivered seven quarters of profit, the journey is far from over as the war of fibre has yet to be fought. Its advantage - being small it has control over cost and pricing and can be as competitive as the bigger boys.

With the better results, Afzal has already waved his magic wand, perhaps he now needs a better instrument to fight the fibre war.

Deputy news editor B.K. SIDHU finds Afzal very witty.

Prasarana's funding needs

Prasarana may raise up to RM10bil to finance LRT extension

It is to finance extension of Kelana Jaya and Ampang LRT lines

Syarikat Prasarana Negara Bhd plans to raise between RM5bil and RM10bil over the next five years via a bond sale to fund the light rail transit (LRT) extension.
About RM7bil is needed for the extension of the two LRT lines (Ampang Line and Kelana Jaya Line). A further RM3bil is required for infrastructure and other things like buses that provide feeder services for the integration of the urban transport system in the Klang Valley.
The first package for the LRT extension was announced in November, while the tender for the second package is under way. The tender closes in mid-April.
“We will be going to the market again after raising RM2bil in 2009. At this juncture we are still working out how much we need to raise over the next five years. It could be anything between RM5bil and RM10bil,” Prasarana group managing director Shahril Mokhtar said in an interview with StarBiz. “We are looking to raise bonds just like we did the last time.''
He said Prasarana decided to opt for bonds for future funding requirements owing to the good response to the earlier RM2bil bonds. However, Shahril could not say exactly when the bonds will be issued.
Prasarana is a wholly-owned unit of Minister of Finance Inc. It is the asset owner and operator of several public transport providers, namely the Ampang and Kelana Jaya lines, KL Monorail system, bus operations in the Klang Valley and Penang, as well as cable car services in Langkawi.
Shahril said Prasarana expected to receive 470 new buses by the third quarter this year to add to its pool of 1,200 buses that provide feeder service to LRT stations in the Klang Valley.
Of the 470, about 70 are shorter buses measuring eight metres in length, which are suitable for narrower roads and could be used in residential areas. A standard bus is 12m in length.
“If the shorter buses work out well in residential areas, we will order more,'' he said, adding that each bus cost between RM400,000 and RM500,000.
Asked if the Government was subsidising Prasarana's operations, Shahril said: “We are being subsidised because we receive fuel subsidy but there are quotas and limits too. For everything else we raise our own financing and that is why we need to sell bonds to raise financing.''
Turning to the two LRT extensions, he said they covered 17km each for the Kelana Jaya Line and Ampang Line.
Work on the first stretch of the rail extension will begin next month, where the Kelana Jaya Line will link the Kelana Jaya station to Glomac Business Centre through to Lembah Subang.
The 17km stretch of the Kelana Jaya Line starts from the Kelana Jaya station and connects to Subang, USJ and ends in Putra Heights. The Kelana Jaya and the Ampang line extensions will be completed in 30 and 27 months respectively. There will be 13 new stations.
In November, Prasarana appointed Trans Resources Corporatio Sdn Bhd and Bina Puri Holdings Bhd-Tim Sekata JV as main contractors for the first package of the Kelana Jaya Line and Ampang Line respectively. Several others had been appointed as sub-contractors.
As of January this year, the Kelana Jaya Line's average daily ridership during peak hours jumped by 40% year-on-year to 47,714 commuters. By B.K. Sidhu

First published in The Star on March 1, 2011

Fancy a chef in the skies?

Chef-on-call-First.

That's Malaysia Airlines way of taking care of its first class passengers.

To get that hot sizzling cuisine, you need to pre-book. By the way there is no real chef onboard, but you can imagine he is there.

MAS believes the food would be truly sumptous, and it is menu will be regularly refreshed to make your in-flight dining trully rewarding.

It says: Choose from a total of 45 sumptuous gourmet dishes.

We have 4 destinations: Kuala Lumpur, Sydney, London & Amsterdam - with each serving a different menu.

You also get Caviar if you ask.

 

AIRASIA X bid sale

The "massive sale' has begun.

Normally airlines allocate 10 seats or so for the cheap fares.
Is that the same this time around?


According to the airline's statement -  “Massive Sales” is for all long-haul destinations excluding Tehran and Tokyo.

Six days promotion beginning 1st March (12:00 noon KL time) to 6th  March (00:00 midnight KL time).
Travel time: 13 September, 2011 to 29 February, 2012.

In demand are: “Kangaroo Routes” for RM199*
London and Paris from as low as RM529*.
Fares to China are offered from as low as RM149* to Chengdu and from RM199* to Tianjin and Hangzhou.

India, going, going, going..... for RM199*

Deals to the Kimchi land, Korea (Seoul) or to the gateway of South Island, Christchurch - the offer is for  RM249*

Premium seats to all AirAsia X destinations above from as low as RM729*.

BEAR IN MIND:

* Fare is applicable for one way travel only and is inclusive of airport tax. Terms and Condition apply.

AAX buys more planes but Sydney is nowhere in sight....

AirAsia X on RM1.5bil expansion route
It’s buying three new A330-200 aircraft, targeting RM2bil revenue

AirAsia X (AAX) has signed a contract to buy three new A330-200 aircraft for RM1.5bil as part of its expansion strategy and it hoped to earn RM2bil in revenue this year.
This latest aircraft order that comes with an option to add two more aircraft will be deployed for long haul destinations into Europe and possibly Africa from next year onwards.
AAX is still pinning its hopes to ply the KL-Sydney route but it has yet to receive the approval from the Government.
AAX CEO Azran Osman-Rani said the airline would use the new aircraft to increase frequencies to Paris and London and ply new routes in Europe.
He did not identify the new routes but earlier reports suggested that AAX was considering the viability of flying to Nice, Cologne, Berlin and Moscow.
“The purchase of the new A330-200s will make the economies of long haul flying more viable as the aircraft is 15% more fuel efficient,'' Azran said after the signing ceremony held between AAX and Airbus which was witnessed by National Economic Council member and MCA president Datuk Seri Dr Chua Soi Lek.
AAX will take delivery of two aircraft beginning the middle of next year and the third in 2014.
On funding for the new planes, Azran said it would be via a variety of debt financing solutions.
AAX now has 28 orders for A330 and 10 A350. The airline has taken delivery of eight A330-300 and the A350 will only be delivered from 2015.
“Instead of waiting for the A350 aircraft we can continue our long haul expansion with the A330-200. We are also adding more seats for our XL class from 18 to 24 and we believe we offer significant value for a fraction of the cost of a business class seat,'' he said.
Azran said the airline carried 1.92 million passengers last year and this year he expected AAX to fly 2.7 million passengers.
In terms of revenue, he expected the airline to earn RM2bil this year from RM1.3bil last year. AAX recorded RM81mil net profit and saw a 14% return on equity in 2010.
“We are looking at a 50% to 60% growth in revenue this year and as at end of last year we have a cash balance of RM358mil,'' he adds.
The KL-Sydney remained a contentious route as it had been more than a year since the airline had asked for landing rights. The city is listed in the Economic Transformation Programme (ETP) as one of the 10 cities which the Government has plans to increase flight frequencies.
At last week's ETP meeting on tourism it was said the matter was brought up again as to what was holding up the opening of the route to competition.
“We were led to believe that there may be a paper presented to the National Economic Council on the matter soon. We, as a group are committed, but we also know things like this takes time. It is up to the Transport Ministry to look into it, we cannot give an update on when we will get (the nod for KL-Sydney),'' AAX funder Datuk Seri Tony Fernandes said when asked on the status of AAX's request to fly the KL-Sydney route.
Dr Chua said the paper had not been submitted but “I am sure the Government will make a decision based on national interest and not the interest of Malaysia Airlines or AirAsia.''
On the initial public offering (IPO) of AAX, Fernandes said it was on schedule this year although AAX must first get approval for its route expansion from the Government.
“One of the factors that we have to look at before going for an IPO is the route allocation policy, we have to determine what this is going to be, there must be clarity,” Azran said.
“One of the most important things for us is (also) the issue of equity as the expansion of AAX is inevitable, but we need to (raise) money to support the 20 planes that we want to buy.''
The airline is considering a dual listing, on Bursa Malaysia and possibly the other on a US stock exchange.
Azran expects AAX to fly some new destinations this year. However, the inaugural flight to Christchurch in April will go on as planned despite the recent earthquake in New Zealand.
Over the weekend, AAX announced that former International Trade and Industry Minister Tan Sri Rafidah Aziz would take over from Datuk Kamarudin Meranun as the airline's new non-executive independent chairman. Kamarudin said that the airline could tap into Rafidah's vast expertise in dealing with government and international trade matters.

First published in The Star on March 1, 2011

AirAsia X buys 3 new A330-200 planes

When every airline is worried about the rising oil price, this airline signs a RM1.5bil deal to buy three new aircraft so that it can go for 14 hour hour flights to Europe.

Change for better corporate governance

A VOICE FOR CHANGE

THE walkout and calling for a boycott of the PLUS Expressways Bhd EGM on Wednesday by some minority shareholders is not surprising.

The minorities alleged procedural irregularities at the EGM and as they walked out of PLUS Menara Korporat, they were chanting the words “illegal EGM.''

But those who conducted the EGM denied any procedural irregularities, they claimed everything was done legally.

The EGM was called to vote on the UEM Group and Employees Provident Fund (UEM-EPF) takeover of PLUS for RM23bil or RM4.60 a share.

Despite the drama some want to think that it could have been orchestrated while others felt it was show of shareholder activism the promoters got the nod for the takeover.

About 800 people were at the EGM, and about 100 minority shareholder walked out although some had claimed the number to be “several hundreds.''

Whatever the number may be, what really irked the minorities was the voting procedure and the notion that even if they stayed, they could not have made a difference. To some, it was a “forgone conclusion that the proposal would be approved'' as the number of those in favour outnumbered the minorities.

The Wednesday minority walkout is neither the first one, nor will it be last. On Sept 24, 1999 about 500 shareholders walked out before a vote was called on the proposals tabled at the Unico Holdings Bhd EGM.

The bone of contention then was over the proposed restricted issue of 1 million new shares in Unico-Des Plantations Bhd at an issue price of RM1.50 per share to the 17 directors of Unico and Unico-Desa, thus entitling them to a proposed bonus issue.

Again on June 14, 2003 a group of minority shareholders walked out of Kejora Harta Bhd's EGM as they were angered by the voting process for the proposed takeover of Rampai Niaga Sdn Bhd, which holds the Body Shop franchise.

In almost any company, the shareholders' primary voice comes in their opportunity to speak and vote at general meetings. Investors today, are willing to exercise their rights; to express dissatisfaction and take management to task.

In fact, shareholder activism is gaining ground, be it in the United States and Canada or Asia. Malaysia has its own Minority Shareholder Watchdog Group and Japan Ombudsman.

Shareholder activism involves any action taken by minority investors to improve the governance of companies, ensure fair treatment of all shareholders and raise company value over time. It is a vital part of “market discipline,” which is a key component in corporate governance reform, says a report. Activism has an important economic role too as it contributes to stronger, deeper capital markets.

If the minorities want changes then they have to be more pro-active during EGMs. As an interested party, they must let the company knows how it should be run. Bear in mind that carefully constructed views are often taken seriously save frivolous or vexatious remarks.

Casino mogul Kirk Kerkorian is someone who believes in changing the company's direction and to do that he buys a small stake in a company and sits on the board so that he can direct the board to change. His stake may be small given the fragmented shareholder structure of the US companies but he is also a billionaire.

So is Carl Icahn. Also known also “billionaire Robin Hood,'' he is often refered to as a corporate raider turned shareholder activist who puts pressure on companies to increase shareholders' value.

It all boils to fighting for your rights. There is nothing wrong with that so long you don't trample others along the way. The voice of the minorities is as important as other parties, though the major shareholders always get the upper hand when come to investment and voting rights. Perhaps, to make a difference, we need more Kirk and Carl's here but shareholder activism should not be about short-term gains for the company or the investor, it should be about long-term value.

● Deputy News Editor B.K. Sidhu feels that the choice to make a difference lies within us.

First published in The Star on February 25, 2011

BIG FARE SALE

Book your holiday, you deserve it!

It began with Malaysia Airlines fare sale under its Malaysia Airlines Travel Fair. It offers 85% discount to all destinations till February 28. Business class going, going, going for 50% off. Travel period - March 21 to Dec 31.

AirAsia jumped in this week with its Big Sale. One-way low fares for one million seats to various domestic and international destinations. Fares as low as RM5 (excluding airport tax and other applicable fees) for travel between Sept 13 and Feb 29, 2012. Booking is till this Sunday.

Jetstar follows with its sale spectacular!
Sale fares are for travel in selected periods in 2011.
Sale ends Sunday 27 February 2011,  unless sold out. Sale may be extended.

Look out for AirAsia X, that's next
Its Xtravaganza sale for flights from 11 Nov 2011 onwards, goes live at midnight 1 March, says AAX boss Azran Osman Rani.
The sale is for seats to London, Paris, Seoul, Tokyo, Delhi, Mumbai, Melbourne, Perth, Gold Coast, Taipei, Hangzhou, Tianjin, Chengdu, Christchurch..

Tiger Airways is on the prowl again

Tiger Airways Holdings Limited said today that it intends to buy a 32.5% stake in Philippines based South East Asian Airlines (SEAIR) for US$6mil.

SEAIR will expand operations on both domestic and international routes.

SEAIR will increase to double daily its flight from Manila Clark to Hong Kong from April 15 onwards to meet strong demand, Tiger says.

When will SEAIR fly into LCCT or KLIA?

Surging oil prices will hit airline bottomlines

Brent crude oil has hit US$113 a barrel on the Libyan unrest. This spells trouble for airlines as the cost of fuel will escalate.

This evening AirAsia is going to announce its 2010 results and its boss Datuk Seri Tony Fernandes has given an insight of what to expect - "Shame oil price will knock shine off awesome results but we are in great position to handle this crisis. We thrive during crisis'' - on Twitter.

As at 6pm
AirAsia reported an impressive set of financials with net profit reaching the billion mark to RM1.066bil from RM506mil. This is more than 111% higher than what it reported for same period in 2009.
Revenues were also 26% up to RM3.9bil from RM3.1bil. Revenue growth was supported by 13% growth in passenger volumes and average fare that was 5% higher at RM177 compared to RM168 achieved in 2009.
Earnings per share shot to 38.6 sen from 20.60 sen.
Fuel bill RM1.2bil versus RM900mil. 
Debts stood at RM7.8bil up from RM7.6bil in 2009.

Unfortunately, no dividends were declared.


Separately, The New York Times in its article headline "airline passengers should prepare themselves for sticker shock this year'' said "as the carriers have tried to keep up with rapidly rising oil prices, they have already increased their fares four times since the start of the year, compared with only three increases for all of 2010. The airlines have also raised some of their fees, imposed summer peak-time surcharges and added hefty fuel surcharges on international flights.''

It added that “Airlines are under a lot of pressure,” said Severin Borenstein, a professor of public policy at the Haas School of Business at the University of California, Berkeley. “Demand is recovering but rising fuel prices may short-circuit that.”
 

AirAsia financial results are out. Lets wait a day for MAS results and a surprise from MAS this Saturday.

AirAsia may have made its first billion but MAS posted a 65% drop in net profit to RM226mil for the fourth quarter ended Dec 31, 2010 from RM640mil. 
But operating profit increased five fold to RM137mil from RM29mil due to a 5% increase in ticket sales.
The lower profit is because its fuel bill was higher despite carrying many more passengers in the quarter.
For full year the capacity was higher by 4% but still the airline reported lower net profit of RM237mil from RM522mil in 2009. Revenue was higher at RM13.5bil vs  RM11.7bil in 2009.
But the boss of MAS Tengku Azmil Zahruddin is quite happy with what the airline has achieved. He kept saying it was "good profit'' when he released the results today.

PLUS takeover gets nod ...but not without some drama...

PETALING JAYA: PLUS Expressways Bhd received approval from its shareholders on a RM23bil takeover bid by major shareholders UEM Group and the Employees Provident Fund (EPF) despite a commotion followed by a walkout of minority shareholders.
A relatively big group of minority shareholders stormed out of an ongoing PLUS EGM yesterday claiming procedural irregularities, shouting their displeasure to those outside, which included members of the media.
The minority shareholders were shouting for a “boycott” of the “illegal” EGM while walking out from the hall.
PLUS' auxillary police were immediately seen at the doors of the hall following the walkout by shareholders in protest.
Senior independent non-executive director Tan Sri K. Ravindran, who chaired the EGM, denied there were procedural irregularities as claimed by minority shareholders.
“We did everything within the legal ambit of whatever we had to do,” he said.

PLUS minority shareholders staging a walkout after the first vote.

The toll operator has called for the EGM to table a takeover proposal from UEM-EPF for RM23bil, or RM4.60 per share.
The EGM, which lasted about four hours, was attended by some 800 people. The meeting took a short break after the “ruckus” and resumed shortly to vote for the remaining resolution. Institutional shareholders were present either physically or by proxies.
Amran Ariffin, 36, who has 45,000 PLUS shares, said the chairman of the EGM had refused to record a minority vote by a show of hands despite the fact that the deal would very likely go through on majority shareholder support.
“They don't even want to play fair. That is the contention right now. Even if that (show of hands) won't affect the final outcome, they don't even want to follow the procedure. That is embarrassing,” he told reporters.
“We were denied a moral victory. The chairman said 96% of the proxy voters have already voted in favour of the proposal so we couldn't have changed anything.”
He said PLUS had been paying shareholders a consistent level of dividends, and likened the takeover deal to a “forced marriage”.
Amran said the chairman had called for a show of hands to vote on a proposed takeover by UEM-EPF, but a demand for a poll vote from the floor cut the counting process short, which means there is no official tally of dissenting votes.
Ravindran acknowledged that there was a show of hands but had not disrupted the meeting. “There were two shareholders who wanted to have a poll instead. I am duty bound to acknowledge the shareholders.”
“We have to give the proper rights to all the shareholders who own the floor,” he added.
Ravindran wanted to clarify that acceptance of the offer should not be seen as selling off the company.
“The company is not for sale but when somebody makes an offer, we can't independently just keep it aside and say we don't know anything about it,” he said.
He stressed that the offer had only been endorsed by independent directors as a credible offer after advice from independent advisors, including AmInvestment Bank Bhd and Goldman Sachs.
PLUS' major shareholders UEM, its parent Khazanah, and EPF (who are also the offerors in the deal) are abstaining from voting at the EGM.
Khazanah, UEM and EPF hold a combined 67.7% stake. EPF holds a 12.3% stake in PLUS while UEM Group, together with its parent Khazanah, holds 55.4%.
Based on shareholding spread, some 1.55 billion shares, or 31% stake, are eligible to vote on the takeover offer by UEM-EPF. However, only 1.06 billion or 21% of the total PLUS shares voted at the meeting. Of the 21%, 99% were for the deal.
“We are targeting for the payment to the entitled shareholders in early September and delisting (on Bursa Malaysia) by end-September,” PLUS chairman Tan Sri Mohd Sheriff Mohd Kassim said.
“We are quite confident that we have followed the correct procedures,” he said, when asked to comment after some disgruntled shareholders walked out of the EGM.
Minority Shareholder Watchdog Group (MSWG) CEO Rita Benoy Bushon said that during the EGM, the minority shareholders requested that the voting be carried out by show of hands and the board agreed to this request even though there was already a request for a poll vote by two shareholders.
The request for the poll vote was then withdrawn by the said shareholders. Subsequently, when the process of counting of votes by show of hands for the resolution on the proposed disposal was in progress, another two shareholders requested for voting by poll.
“The observation by MSWG was that the voting by hands was not in favour of the proposed disposal,” she said.
Rita said the chairman of the meeting acknowledged the request for a subsequent poll vote, resulting in the minority shareholders expressing their displeasure on the non-completion of the counting of votes by hands and staged a walk-out.
“The chairman explained that his acknowledgment for such a poll request was in accordance with the Memorandum and Articles of Association of the company.
“The resolution on the proposed disposal was carried by way of poll with 99% voting for the resolution,” she said.

First published in The Star on February 24, 2011

MAIDEN DIVIDEND FROM AXIATA

Axiata Group has rewarded shareholders with a handsome divident of 10 sen per share sooner rather than later.
This is its maiden dividend after its separation from big bro Telekom Malaysia Bhd in early 2008.

Axiata said today it made RM1.77bil net profit for financial year ended Dec 31, 2010 versus RM1.65bil reported a year earlier.
Revenue rose to RM15.6bil from RM13.3bil but EPS was down 1 sen from 22 to 21 sen in 2010.
For the fourth quarter it took a hit in impairment for its Indian operations, Idea Cellular which led to a net loss of RM367mil compared to RM558mil net profit in 2009.

It explains why the impariment: 

"Non normalised PATAMI rose by 7%, to reach RM1.8 billion, due to the non cash FRS

impairment accounting adjustment on Idea of RM1 billion. Without the impairment, PATAMI

growth would have been 73%.

Idea represents an important strategic stake for Axiata, in a huge market which is growing

rapidly and the Group has always taken a long term view on the investment. The decision to

impair is based on conservative accounting standards, and in conjunction with the

impairment assessment requirement under FRS 136 “impairment of assets”. The possibility

of an Idea impairment has been consistently communicated to market.

The decision therefore, does not reflect Idea’s performance. Against hyper competition and

an uncertain regulatory environment, Idea is well recognized as one of the best performing

operators in India. It is now number 3, in terms of revenue market share, from number 5

three years ago. The Indian market, with a population of 1.2 billion, has tremendous growth

opportunity in voice given its relatively low penetration, and at a later stage, data services

.Axiata remains committed to Idea and has every faith in its long term value.''

Deal approved amid drama at PLUS EGM

Petaling Jaya: PLUS Expressways Bhd's minority shareholder walked out from an ongoing EGM at around 12.30pm.

Disgruntled shareholders marched out from the hall exclaiming the EGM to be illegal and called for a boycott of the meeting.
The board of directors have just stepped out from the hall for a short break after three hours into the meeting.
The meeting will resume after the short break. It is understood that only one resolution has been voted for at the moment.
PLUS has called for the EGM to table a takeover proposal from UEM Group and the Employees Provident Fund for RM23bil, or RM4.60 per share.
PLUS' major shareholders, who are also the offerors in the deal, UEM, its parent Khazanah, and EPF are abstaining from voting at the EGM.
Khazanah, UEM and EPF hold a combined 67.7%. EPF holds a 12.3% stake in PLUS while UEM Group, together with its parent Khazanah, holds 55.4% of the firm.
First published in The Star on February 23, 2011

TM goes back to Celcom for the cellular touch

TM poised to return to cellular business

Telekom Malaysia Bhd (TM) and Celcom Axiata Bhd may potentially be entering into a 10-year collaboration that allows TM to get back into the cellular business it once sold off but now needs mobility solutions to bridge the gap in its current product offering.
For Celcom, the collaboration allows it access to a high-speed broadband (HSBB) network. Its foray into the fibre business gives it exposure to millions of homes and offices to push rich multimedia services such as IPTV and video on demand and stay in competition with rival Maxis Bhd which aspires to become an integrated player.
The partnership may be a game changer in the way Celcom and TM operate in the future. Each will have a platform that they need to push multimedia, fixed and mobile solutions to users.
“We will not become a full-blown cellular player as our focus is our fixed-line business. (But we will opt for the) mobile virtual network operator (MVNO) model as it allows us to get into the cellular business that we can monetise on,'' TM group CEO Datuk Seri Zamzamzairani Mohd Isa said.
TM in a statement said it would opt for the MVNO model to offer its own brand of mobile voice and data services to complement its existing fixed-line portfolio.
Zamzamzairani said they (TM and Celcom) could either offer services jointly or individually.
This TM/Celcom partnership also means Maxis may have more competitors on hand than it had hoped for. Hopefully, the consumer will be the big winners in terms of choices. And with more players competition should drive rates down and, perhaps, improve the quality of services and offerings.
Yesterday, both Celcom and TM inked a memorandum of understanding (MoU) to cooperate on several areas and gave themselves two months to hammer out a definitive collaborative agreement.
Celcom was once upon a time a unit of TM but, after the demerger, it was hived off to Axiata Group.
Asked if it was a mistake to demerge with Celcom years ago since it now needed to also offer cellular services to its users, Zamzamzairani said “it was a shareholder issue and not management.''
This MoU signing came just over a month after Maxis inked a deal to use TM's HSBB for a 10-year period. The sharing of resources will save the country millions in infrastructure build-up but both Celcom and TM could not give any estimates of how much they would save in infrastructure sharing.
“It is in the best interest of the telecoms industry, especially the service providers, to progress towards network infrastructure sharing to minimise capital expenditure. It does not make sense for the industry to duplicate infrastructure,'' Information, Communications and Culture Deputy Minister Datuk Joseph Salang said after witnessing the signing ceremony yesterday.
Under the MoU, Celcom and TM will explore possible collaboration in the areas of HSBB be it access or transmission, wholesale Internet access, digital subscriber line access (end-mile copper network), fiber network system via wholesale long-term lease or MVNO services.
“In this day and age of multiple screens, be it phones, tablets or TVs, consumers are now being entertained and are interacting with each other in a multitude of ways,” Celcom CEO Datuk Seri Shazalli Ramly said. “The old paradigm of fixed versus mobile access is becoming increasingly irrelevant due to consumer behaviour, the lines are blurring (and we need to provide content via multiple access and devices, thus the need to collaborate).''
IDC Malaysia associate market analyst John Cheah believes TM will be able to regain a foothold in the lucrative mobile market with a tie-up with Celcom.
“However, taking into account that there are already numerous mobile operators and MVNOs, TM would need to identify a niche market or provide competitive rates,” he said. “TM could leverage on its existing broadband brands and provide a mobile data plan to complement its fixed-line counterparts.''
As for Celcom, he said: “It would be able to develop new fixed-line products. It would help control capital expenditure for Celcom in terms of long-term investments and maintenance of its next generation backhaul networks.''

First published in The Star on February 23, 2011