Will you BUY GPacket???? I will not cos too many competitor, if buy maybe for contra play or foreign fund buying.
What’s Up? … dated Aug 2010
Green Packet Bhd, a telecommunications solutions and broadband service provider, posted a higher pre-tax loss of RM79.496 million for the half-year ended June 30, 2010 compared with RM50.126 million chalked up in the same period last year.
Turnover, however, jumped to RM176.8 million, from RM97.959 million previously, but the company incurred a capital expenditure of RM517 million as at end-June.
It attributed the increased turnover to a higher subscriber base for the wireless broadband business, securing new customers for the solution business and increased revenue from international wholesale voice business.
The company was on track to achieve a revenue of RM400 million for 2010.
The company would allocate RM500 million for the next two years (2011-2012) to increase its broadband coverage to 65 per cent. Of the amount, RM150 million will be utilised in the second-half of 2010. It was mainly to improve coverage and capacity.
Sale of devices was strong in the second-quarter amid rapid and growing deployment of WiMAX networks globally. They are eyeing North America, Middle East and Europe for both its software and hardware solution businesses. Overseas business currently contributed 40 per cent of the group's revenue.
In the first-half of the year (2010), the company focused on fulfilling its commitment to deliver good network performance and a consistently high-level of service and customer satisfaction through Packet One Networks (P1), its 4G WiMAX operator business.
P1 ended the second-quarter with cumulative subscribers totaling 196,000 with 21,000 new subscribers added during the quarter. Its network coverage had also increased, from 35 per cent population coverage at the end of last year, to 40 per cent and was on track to reach 45 per cent by end 2010.
The group is confident of achieving 280,000 subscribers by 2010 through aggressive sales and promotion and product bundling, among others.
P1's partnership with SK Telecom, Korea's leading mobile telecommunication company, was expected to boost its strategy to optimise network performance and customer satisfaction. SK Telecom has taken a 25.8 per cent stake and injected RM323 million into P1 and would further provide technical and operational expertise and resources.
Going Forward …
Is the worst over for GPAcket after reporting its earnings for 2QFY2010 quarterly result?
The lost goes hand in hand with GPacket’s capital intensive rollout of its 4G WiMAX network, which is managed by unit Packet One Networks (M) Sdn Bhd, which is the main reason cited by the company for its losses.
Even so, it does not stop this question from repeatedly cropping up. Has GPacket bitten off more than it can chew, even with the company’s repeated assurances that it has not?
According to industry observers, the company’s intense promotion of its WiMAX service, which can be seem by the proliferation of its Potong ad campaign, could lead to problems in overall cash flow, which in turn could thwart its expansion plans.
GPacket’s 2Q2010 cash flow from operating activities as at end June 2010 shows a RM96 million drop from to RM102 million from RM198 million.
Its CEO did say that the successful campaign not only resulted in a surge in subscribers but also churn rate. The churn rate is the rate at which customers discontinue their service with a particular provider.
The higher churn rate this time was the result of network congestion at certain sites. It therefore slowdown its A&P activities quite substantially and stopped selling at congested sites so its customer experience would not be compromised. As a result, P1’s focus over the last six months (Feb –July 2010) has been improving its overall network performance rate which then brought down the churn rate to 3%.
Now its network has the capacity to take future subscriber surges and they have got its foot back on the accelerator for A&P. It started with the launch of WiMAX inside laptops with Intel in June 2010.