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.
Monday, February 28, 2011
Friday, February 25, 2011
Change for better corporate governance
A VOICE FOR CHANGE
● 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
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
Thursday, February 24, 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..
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?
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 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.
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
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 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
Wednesday, February 23, 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:
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
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
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
Subscribe to:
Posts (Atom)