Friday, March 25, 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

    Tuesday, March 22, 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.

    Friday, March 4, 2011

    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.

  • Wednesday, March 2, 2011

    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

    Tuesday, March 1, 2011

    Fancy a chef in the skies?


    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*.
    * 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