YTL E-Solutions Should Not Be Considered Anymore As A Wimax Play

For prophet.

This is from YTL Communications home page here

• Our Background
  YTL Communications is a subsidiary and the communications utility of YTL Power International, a utility group active across key segments of the utility industry worldwide.
  
  Headquartered in Malaysia, YTL Power International operates in Malaysia, the United Kingdom, Singapore, Australia and Indonesia. Its core businesses include: power generation, retail and transmission, and water supply and wastewater services.
  
  YTL Power International is a subsidiary of YTL Corporation, a leading integrated infrastructure developer in Malaysia with global investments in utilities, cement manufacturing, construction, property development and investment, hotel management and development, as well as information technology serving over 12 million customers on three continents.
  
  Both YTL Power International and YTL Corporation are listed on Bursa Malaysia (the Kuala Lumpur Stock Exchange). Both companies are component stocks of the FTSE Bursa Malaysia composite index which comprises 30 of the largest companies based on market capitalisation.

And just how did this came about?

The following is a screen shot from a CIMB report back in Sep 2009.

See also this older posting: Comments On YTL's RM3 Billion Broadband Venture

So what about YTL E-Solutions now? Here are some comments from the same CIMB report.

Would You Want To Invest In Green Packet?

On the EdgeMalaysia: Green Packet looking to turn around in 2010

Now here's someone who is positive about Green Packet, unlike me.

Insider Asia wrote.

• GROWTH for Green Packet's (68.5 sen) core businesses — software and applications and broadband — is expected to gain traction over the coming months.
  
  In fact, the software and applications arm had already turned around in the last quarter. The business reported earnings before interest and tax (EBIT) of RM6.3 million in the second quarter of 2009 (2Q09), a sharp reversal from loss before interest and tax (LBIT) of RM2 million in the immediate preceding quarter.
  
  Although its broadband business — housed under P1 — will remain in the red for the rest of this year, it too is expected to turn around in 2010. The company is stepping up its marketing and promotional activities in line with its network coverage expansion. P1 has signed up 80,000 subscribers by its 1st anniversary, on Aug 19, 2009, and aims to hit 200,000 subscribers by end-2009.
  
  If all goes to plan, Green Packet will return to profitability in 2010. We estimate the company will make pre-tax profit of roughly RM31 million next year, a reversal from our estimated pre-tax loss of about RM82.6 million in 2009.
  
  Thereafter, earnings growth will be strong, as P1's margins and profits should widen exponentially once its subscriber base hits critical mass.

Key point is 'expected' to turn around.

As at Aug 19, 2009, Green Packet's Wimax division, P1 has signed up 80,000 subscribers ( I wonder how many of these subscribers were on trial basis? Were there accounted as full yearly subscribers).

Anyway, get this, what this article is saying that P1 subscribers sboud hit 200,000 by year end. That's an increase of 120,000 subscribers for the last 4 months of the year.

Is that possible?

I do not know but if you buy the story, then it's best for you to weigh out the risk involved.

Anyway the article continues.

• Software and applications boost in 2Q09
  Even though net loss widened to RM27.9 million, from a loss of RM22.2 million in 1Q09, Green Packet's latest set of earnings results for 2Q09 were, nonetheless, encouraging.
  
  In particular, the software and applications unit fared well, reporting EBIT of RM6.3 million in 2Q09, a sharp reversal from LBIT of RM2 million in the immediate preceding quarter. We expect the business will continue to grow going forward.
  
  The company is seeing returns from the various strategic alliances with leading equipment vendors, such as Alcatel-Lucent, Huawei and ZTE Corp, put in place over the past year. It is estimated that Green Packet supplied over 11% of the total WiMAX customer premise equipment (CPE) sold to service providers around the world.
  
  It is also one of the world's largest providers of WiMAX connection manager, which includes the enabling of seamless roaming between WiMAX and WiFi networks. Some of the company's customers include Craig Wireless, Tatung Infocomm (Taiwan), Globe Telecom (Philippines) and PCCW (Hong Kong).
  
  As one of the world's leading WiMAX broadband services providers, Green Packet plans to market its experience and services to other WiMAX operators. The company may even take a strategic stake in promising ventures.
  
  P1 celebrates 1st anniversary
  A year after launching Malaysia's first WiMAX broadband service, P1 continues to lead, by far, its peers both in terms of rollout, coverage and subscriber numbers.
  
  P1 added about 25,000 new subscribers in 2Q09 bringing the total subscriber base to 60,000. The number is below its initial target due to the addition, and equipment integration, of a second vendor, ZTE. The company adopted a multi-vendor strategy, to hasten its network deployment.
  
  Following the successful integration of ZTE equipment, P1 has, once again, stepped up its site rollout plans. We estimate it has, at end-June 2009, achieved about 60% of its 700 sites target by end-2009 and remains on track to hit 45% population coverage by end-2010.
  
  P1 has also re-energised its marketing campaign with special promotions in conjunction with the celebration of its 1st anniversary. So far, feedback from subscribers has been broadly positive. P1 estimates its churn rate has fallen to just about 5% in June 2009.
  
  Gaining market share in fixed broadband
  Indeed, it has been getting a good share of new broadband subscribers in the country, especially considering its still limited coverage, while maintaining a decent ARPU (average revenue per user) of about RM87 per month.
  
  As a comparison, Telekom Malaysia — the country's largest fixed broadband service provider (Streamyx) — reported 40,000 net subscriber additions in 2Q09. Streamyx currently has about 1.37 million subscribers.
  
  With the increased number of sites and coverage areas, P1's subscriber acquisition is expected to gather pace in the coming months. The company indicated that the momentum has picked up since end-June 2009, with subscribers increasing to 80,000 by mid-August 2009.
  
  On the drawing board are plans to expand its distribution network, such as an increased physical retail presence and P1 Direct, a call-to-purchase channel, as well as a string of new products. The latter includes prepaid broadband in 4Q09 and fixed voice 2.0 in 2010.
  
  Foray into mobile broadband
  The company's foray into the mobile broadband market segment was marked by the introduction of the WIGGY in 2Q09. The portable modem offers download speed of up to 10 Mbps and a fair usage of 10GB for RM149 per month. This was followed with the WIGGY 69 in July 2009. With download speed of up to 800kbps and fair usage of 5GB, the WIGGY 69 has received very good response.
  
  Mobile broadband is a fast-growing market segment, what with the increasing demand for broadband-on-the-go. The service is currently offered by all three telcos, Celcom, Maxis and DiGi, using their 3G platforms.
  
  As P1 widens its network coverage, the company should be able to compete more effectively in this market. The expected introduction of WiMAX-enabled laptops — thus, negating the need for portable modems altogether — next year will further enhance the company's competitiveness in the broadband market.
  
  The growth prospects are good given the country's still low broadband penetration rate, currently estimated at about 27%, compared to countries like South Korea, Singapore, Taiwan, Australia and Japan, where penetration rate ranges from 60%-100%. Our government targets a 50% penetration rate by end-2010.
  
  P1 to turn around in 2010
  P1 is expected to remain in the red this year but the company is optimistic that the business can achieve positive earnings before interest, tax, depreciation and amortisation (EBITDA) by end-2009 and report profits in 2010.
  
  It will be the primary earnings growth driver thereafter as margins and profits should widen exponentially once its subscriber base goes beyond critical mass. Local telcos are estimated to earn EBITDA margins of more than 40%. P1 should achieve similar levels within the next three-four years.
  
  Hence, for investors with a longer investment timeframe, Green Packet shares offer significant upside potential from hereon.
  
  The company's balance sheet is fairly solid with net debt of RM49.6 million or gearing of just about 14% at end-June 2009. It will receive an additional RM98 million from its soon-to-be-completed 1-for-2 rights issue.
  
  We estimate its book value at roughly 70 sen per share by end-2009, after taking into account the rights issue exercise and losses for the year.

Aha!

Green Packets has a soon-to-be-completed 1-for-2 rights issue.

And the interesting fact is the statement...

• The company's balance sheet is fairly solid with net debt of RM49.6 million or gearing of just about 14% at end-June 2009

For me, I think the use of the words 'fairly solid' does not tell what Green Packet has done the past couple of years.

Take a look at the table posted by Insider Asia.

In 2007, Green Packet was making money. It made some 30.2 million.

Ironic that Insider Asia did not highlight Green Packet's 2006 performance. It made 55 million. ( see Quarterly rpt on consolidated results for the financial period ended 31/12/2006 )

Now if you put this into consideration, Green Packet earnings has gone on such a drastic decline!

Let's look at their earnings since 2006: 55 mil -> 30.2 mil -> -55mil -> -84 mil (estimate losses from Insider Asia)

How would you interpret the above?

Let me try. The company went from making 55 million a year to making losses of over 84 million. Would that be a fair statement?

Now here is fy 2007 q4 earnings for Green Packet. Quarterly rpt on consolidated results for the financial period ended 31/12/2007

Now if you open the pdf file attached in the earnings report, this is what you will see in its balance sheet.

As per Green Packet's report, it had 242.467 million then and no debts!

A company which was flushed with cash.

All 242 million! And this was for financial period ending 31/12/2007.

Show me the moolah babe!

But... compared to now? According to Insider Asia, Green Packet is now fairly solid with a net debt of 49.6 million.

Fairly solid?

In less than two years, the company has gone from a net cash of 242 million to a net debt of 49.6 million!!!!!

Now would you consider this as fairly solid?

Or fairly fast deteriorating?

How?

Now if you look at that 2007 Q4 earnings, you can see the previous years figures. And as per Green Packet's report, its fy 2006 balance sheet showed net cash of over 300 million!

How?

Shocking?

Oh yeah... come on yo! It's the wimax business and you need millions and millions of capital outlay.

Yeah man.

That's absolutely spot on.

And where is the return?

How much is the return?

When will you see the return?

Ah... of course, if the rights issue goes is a success, then Green Packet will soon be cash rich company again!

Question is do you want to put money in such a business?

Green Packet Again

Had the following comments on my posting Green Packet Growth Story Continues: Losses Worsen!

• Bean Chun Toi said...
  Your comments really sulks.
  
  Firstly, no CEO will paint a bleak picture about their own company, esp small companies, even it is true.
  
  Secondly, as an expert analyst, you shud know that such infra company need billion to expand in the next few years. This G Packet is not only incurred losses this quarter but is likely to incur lossses next 1 to 2 years.

Chun Toi had posted comments on the blog before. I do remember his comments on a rather extremely old posting on Mieco Chipboard: VIII. Found it strange that Chun Toi would want to do that. Anyway I made a reply in a new posting, Are My Comments On iCapital Overdone?

So Chun Toi thinks my comments really sulks?

Perhaps sucks was the intended word. lol.

Anyway since I am extremely free, let me devote my time to answer Chun Toi in full detail.

Of course, no CEO will want to talk bad about their company. But what are we talking here?

CEO said that the company is growing but instead the earnings shows that it's the losses that is growing.

Is this acceptable? If you say it is, who am I to argue for it's your right of opinion.

But is it ok for you that I do not find Green Packet's CEO comments to be acceptable?

Now I wrote on Green Packet so many times before. Here's one posting More On Green Packet dated February 29, 2008. Green Packet had announced its earnings the previous day.

And some of the comments mentioned in the press were..

• "Should there be any further delays, we still can achieve triple-digit revenue growth; if not, very close," Puan said.
• Green Packet Bhd, which reported 24% higher revenue of RM122.84mil for the year ended Dec 31 (FY07), expects a 100% growth in revenue this year as its diversification plans start to bear fruit.

Revenue growth? What good is revenue growth when there is no earnings to show?

• The company's fourth quarter net profit shrank 98 per cent and full-year earnings fell 45 per cent to RM277,000 and RM30.2 million respectively, mainly because of higher operating cost at its local WiMAX business.

Of course, one can easily close their eyes and defend the company by saying that no CEO is insane paint a bleak picture of their company.

However, when the company is not doing well, earnings fell like crazy to a paltry 277 thousand but the company talks about issues like revenue growth.

Is this acceptable or is this called misleading?

Hey I am open. Let's use 'the acceptable' route. Let's assume that it is a OK and let's use the stock market as a barometer. Now assuming that the investor believes Mr.Puan's statement that Green Packet future will be very bright and buys the triple-digit revenue growth projection and buys the stock from the market.

Is this assumption ok?

Green Packet traded that day between 2.25 and 2.39.

Yeah "no CEO will paint a bleak picture about their own company, esp small companies, even it is true."

So if one bought at 2.25, look at Green Packet today. It's only at 0.845!!!!!

How? For the investor bought based on what Puan promised in the local media, how do you think the investor would feel?

And what's the alternative?

Oh dear... surely I would not know. lol

And what now for the posting More On Green Packet now?

And what about Wimax potential?

On 16th March 2007 I wrote WiMax.

• So how big is the piece of cake? Anyone? What's the potential earnings?
  
  At 0.93, ytle is valued at 1.181 Billion.
  At 0.815, redtone is valued at 216.788 Million.
  At 5.05, greenpacket is valued at 2.212 Billion.
  err... who owns Asiaspace dotcom?
  
  How???
  
  Based at current valuations... can future earnings be used as a catalyst to boost the share price of these listed stocks?

Green Packet at 0.845 is only valued at 337.945 million!

This was Green Packet's announcement before they were rewarded the Wimax contract on Feb 2007. Quarterly rpt on consolidated results for the financial period ended 31/12/2006

Green Packet then had cash balances of 303 million, no debts and made some 15 million for the quarter.

On 17th Feb 2009, I wrote on a more in dept posting on Green Packet. I will re-use that posting again since the posting shows the what happened since June 2007.

I will add in some new comments in purple bold font.

............................... Perhaps not exactly on Green Packet's earnings but I am just going to do a simple look back at historical news article on Green Packet.

25 June 2007.

• 25 Jun 2007: Corporate: Green Packet: We have nothing to hide
  By Cindy Yeap
  
  Green Packet Bhd's share price ended at RM4 last Friday, its lowest for the year. In the last two weeks, the largest capitalised stock on the Mesdaq Market saw over RM444 million of its market capitalisation wiped out, and its share price plunge nearly one-fifth during the period. (comment: what's the price of Green Packet now?)
  
  Some of the losses may have been due to questions raised on the company's high level of receivables of late, causing investors to take profit on their holdings, analysts say.
  
  "While there may be nothing really wrong with the company, one can't blame investors for choosing to take profit, in the light of the recent fraud at Transmile Group Bhd," says one analyst.
  
  After all, most investors would already be sitting on healthy gains, considering that in a span of two years, Green Packet's share price has risen over 10 times from the 55 sen at which it was sold in May 2005.
  
  But at its RM4 close last Friday, Green Packet shares had fallen 30% from its all time high of RM5.75 on Feb 23. The stock last closed above RM5 on June 7.
  Should one be concerned? Will the stock continue to slide?
  
  Green Packet's CEO Puan Chan Cheong says some investors had contacted the company to check on its level of receivables, and that the company had done its best to allay their concerns.
  
  "Our stock was performing when the market was not performing. Now that the stock market is moving, some investors may have chosen to take profit and put their money elsewhere.
  
  "We understand that investors are shaken by recent news of accounting irregularities and may have some apprehension. We will continue to do our best to answer any questions investors may have. We've explained that it is not unusual to give six months' credit to Chinese companies. We've got nothing to hide. Our FY2006 accounts have already been audited and passed by shareholders at our recent annual general meeting," Puan tells The Edge.

Jan 24th 2008, GPacket expanding solutions business aggressively. Here are some highlights from the article.

• Green Packet reported a 69.8% year-on-year decline in net profit to RM6.61mil in the third quarter ended Sept 30, 2007. (comment: 69.8% decline in net profit! oO)
• On this, Puan said: “Shareholders should look at the long-term prospects and fundamentals of the company. We are very optimistic of our newest business pillar – converged telecommunication services – and foresee solid growth from 2009 onwards even as the technology matures and more WiMAX products are made available. (comment: long-term prospect and fundamentals? what does serious decline in net profit margins indicate? )

** Same issue. Company was doing bad but Puan continued to talk up the company prospects! **

4 Feb 2008: Corporate: Taking a chance on Green Packet. (by By Cindy Yeap) Some noteable comments.

• It is worth noting that the stock has, in the past 11 months, lost over 70% of its value when measured against its all-time high of RM7.80 on Feb 26 last year. This was in spite of the fact that all four stockbrokers polled on Bloomberg are still calling a "buy" on the stock, valuing the company at least RM4 a share.
  
  Now that Green Packet's share price has fallen almost to RM2, some investors with a long-term view are looking at the stock again. Is the time ripe to pick up Green Packet shares? Has its share price "bottomed"?
• The brokerage — whose sister company OSK Technology Ventures Sdn Bhd is a substantial shareholder of Green Packet with 16% stake — expects Green Packet to book RM49 million net profit for the year ended Dec 31, 2007. This implies an expectation that the company will make RM20 million net profit in 4Q2007. For the nine months ended Sept 30, 2007, Green Packet made RM28.8 million net profit, down 28% from the RM40.2 million made in the previous corresponding period.
  
  "We advise investors to take a long-term view of the stock, considering the interim challenges," OSK Research says.
  
  None of Green Packet's top three shareholders — Green Packet Holdings Ltd (33.78%), OSK Technology Ventures (16%) and PacificQuest (8.26%), which is controlled by its Saudi strategic partner — sold shares post its transfer to the Main Board from the Mesdaq Market on July 18 last year, according to stock exchange filings. But they have not been acquiring either. At last Thursday's RM2.50 close, it would cost the three RM350 million to buy the remaining 42% of the company not in their hands. Every 10 sen difference in share price is RM14 million. ( comments: LOL! Vested interest from OSK Research? )

Oh Cindy!

25 Feb 2008: Corporate: 'Transformation year' for Green Packet (by Cindy Yeap)

• For the full year, the company's top line will still see "triple-digit" growth year on year, but the same could not be said for its earnings. "Profits this year, we believe, will be quite stagnant due to high start-up cost, the investments into R&D, the building of human capital. We are working hard to achieve double-digit growth… we will definitely still be profitable," says Puan
• Green Packet is expected to release its full-year 2007 results by this Thursday.
  
  For the nine months ended Sept 30, 2007, Green Packet's net profit fell 28.4% to RM28.79 million from a year ago. Revenue was up 78.1% to RM99.38 million. Its discounted call service Next Global Technology Sdn Bhd (NexTel) contributed RM42.4 million to revenue but only RM14,000 to net profit so far. There is a profit guarantee that NexTel's audited profit after tax would be at least RM8 million for FY2007.
  
  However, Green Packet may have to book some associate losses from its 20%-owned investment in Singapore-based Inova Venture Pte Ltd and 29.9%-owned GMO Ltd. Based on mTouche Technology Bhd's full-year results, mTouche's 40% share of losses at GMO was RM1.2 million, implying that Green Packet's share of losses is about RM900,000. Inova made a RM8.5 million provision for doubtful debts.
• "I believe we will see a new breed of investors with different horizon when results begin to show," he says.
  
  At its RM2.43 close last Friday , Green Packet shares have slipped 69% from its all-time high of RM7.80 on Feb 26 last year. As at Feb 15, it has 3.07 million shares in treasury that it bought at an average cost of just under RM2.50 each. (comments: what is Green Packet current price?)

28th February Green Packet announced its earnings. Quarterly rpt on consolidated results for the financial period ended 31/12/2007

(comments: It had cash balances then of 242.467 million and total debts of only 3.662 million. A year ago, it had cash balances of 303.832 million and debts of only 1.090 million! How was yesterday's balance sheet? A Look At Green Packet Quarterly Earnings )

Blogged the following last year More On Green Packet

In that posting, on Business Times Green Packet aims to regain sales momentum

• "We expect sales in China to be slow during the first half, and eventually to pick up in the second half once the 3G is awarded. The delay is only a temporary setback. We expect the 3G spectrum to be awarded before the Olympics.
  
  "Should there be any further delays, we still can achieve triple-digit revenue growth; if not, very close," Puan said. (comments: ahem. aiming for triple-digit REVENUE growth! Kinda makes you wonder about net profit growth! LOL!)

On Star Business the very same day, Green Packet sees 100% growth in revenue this year

• Green Packet Bhd, which reported 24% higher revenue of RM122.84mil for the year ended Dec 31 (FY07), expects a 100% growth in revenue this year as its diversification plans start to bear fruit.
  
  Group managing director and chief executive officer Puan Chan Cheong was confident of the “achievable” target, as the company had diversified its markets to cushion the impact of a slowdown in any one region. (comments: On the back of a net profit of only 277 thousand, the CEO keeps harping on higher revenue growth!!!! oO)

May 19th 2006. WiMAX major earner for Green Packet

• “Green Packet set its five-year target last year and it wants Packet One to be a billion ringgit revenue company by 2012 and the solutions business to enjoy a lot of regional success by then,'' he said in an interview. (comments: Billion dollar revenue company!!! LOL! can make money or not? oO )
• He was optimistic of turning profitable fast because the investment cost for its WiMAX business was lower than what a company would have spent on 3G.
• The WiMAX business and an end of the delay in the deployment of 3G in China is forecast to make a huge impact on Green Packet's financial fortune.
  
  “We believe our business in China will bounce back stronger in the second half of the year. At the same time, all our other regions will start to contribute more,'' he said.
  
  Green Packet's investment schedule on its WiMAX and geographical diversification will range from the second half of 2007 to the first half of 2009.
  
  “This will push Green Packet into the next phase. And we believe profit will grow at a faster rate then,'' said Puan, who added that the company was confident of a strong double digit or even triple digit growth rate in revenue this financial year.

July 1, 2008 Green Packet expects better results in second half

• KUALA LUMPUR: Green Packet Bhd is optimistic of a better second half despite weak first-quarter performance, says group managing director and chief executive officer Puan Chan Cheong.

Here is Green Packet's most recent quarterly earnings then. Quarterly rpt on consolidated results for the financial period ended 31/3/2008. It had net losses of 2.733 million. Why isn't this fact mentioned? Instead the word 'weak' was used! LOL!

August came. Quarterly rpt on consolidated results for the financial period ended 30/6/2008

Net losses grew to 4.889 million.

The following was posted on Star Business. (Sorry lost the link)

• Friday August 22, 2008
  
  GPacket optimist
  
  KUALA LUMPUR: Green Packet Bhd, which had a weak second quarter performance, is optimistic of seeing a better second half.
  
  Group managing director and chief executive officer Puan Chan Cheong said the drop in group revenue was mainly due to the substantially higher operating cost incurred for the group’s converged telecommunication business unit. There were high marketing expenses.
  
  Green Packet posted a net loss of RM6.6mil for the second quarter ended June 30 while its revenue fell 37% to RM22.45mil.

Revenue fell 37%. LOL! Where is the revenue growth mentioned by Green Packet?

November 11, 2008. Foreigners keen to take up stake in Green Packet

• More than five foreign investors have expressed interest in taking up strategic stakes in Green Packet Bhd, which recently launched its WiMAX service.
• Group managing director Puan Chan Cheong said the parties involved were international telcos and operators from the US, Middle East, East Asia and Europe.
• “The parties had shown interest in our company, especially our WiMAX service, and we are evaluating the proposals now,” he told reporters after its EGM yesterday.

Few days later, Quarterly rpt on consolidated results for the financial period ended 30/9/2008

Green Packet reported a net loss of 10.829 million.

On New Year Eye, Green Packet plans aggressive campaign

• Puan said the wireless broadband business was expected to contribute to profits within three to five years.
• "We should see a positive bottom line maybe in five years or less," he said.

Feb 7, 2009 Green Packet set for a comeback

• Incidentally, Puan is of the Monkey Zodiac, which is deemed very lucky in the 2009 earth Ox year. In the words of a famous feng shui master: “The Monkey can do no wrong this year. Even if he does wrong, somebody else will take the blame.”

ROFLMAO!!!!

The article then continues...

• Certainly, Green Packet’s financial results in 2008 weren’t too inspiring. Its solutions pillar in China, which had always been its major revenue earner, also took a huge dip as its China clients, which are China’s mobile operators, delayed their spending as they waited for the government to issue third-generation (3G) licences.
• For the nine months to September 2008, Green Packet recorded a loss of RM17.91mil from a previous profit of RM29.88mil. Revenue also dropped 34.67% to RM62.91mil. For the third quarter itself, it recorded a net loss of RM10.29mil.
• Puan is confident that improvement will be seen in both pillars this year. With the 3G licences now issued, he expects China to start contributing positively again by the second half.

Remember positive bottom line in maybe 5 years or less.

And so Green Packet announced its earnings last night.

So how did it do?

How much is Green Packet trading nowadays?

** Yeah how much is Green Packet trading nowadays? 0.845 sen.

• Secondly, as an expert analyst, you shud know that such infra company need billion to expand in the next few years. This G Packet is not only incurred losses this quarter but is likely to incur lossses next 1 to 2 years.

lol. If I could, could I humbly suggest for you read my blog more often. I have always reminded everyone that my comments are flawed and I have never considered myself to be an expert.

So what's your point?

And if you had been reading my blog, do check out the posting on ytl-e.

http://whereiszemoola.blogspot.com/2009/04/comments-on-ytls-rm3-billion-broadband.html

Am I not aware of the massive capital required in this technology?

Am I not aware of companies like Nokia less than optimistic view on Wimax's prospects?

Am I not aware of how market leader such as Clearwire is doing now?

Am I not aware that despite the massive millions required in this Wimax business, the return is yet to be justified?

Am I not aware that of course I could be wrong? Of course I am.

ps: some folks (like me) find it rather amusing to have four companies vying for the Wimax business in Malaysia. Isn't the pond to small? And what about the Wimax operators having to compete with other technology? Does this sound like a sure-win business?

ps: when Green Packet was awarded the Wimax contract, it was a company valued at 2.12 billion in the market. If Wimax has so much potential, Green Packet last traded at 0.845. Which means it is only valued at 337.945 million!

Comments On YTL's RM3 Billion Broadband Venture

On Business Times, YTL in RM3b broadband push

• YTL in RM3b broadband push
  
  By Goh Thean Eu Published: 2009/04/24
  
  YTL e-Solutions Bhd (YTLE) (0009), a subsidiary of YTL Corp Bhd, plans to pump in almost RM3 billion to set up a wireless broadband network in Peninsular Malaysia over the next five years.
  
  It will spend one-third of that in the next 12 months as it seeks to play catch-up. Out of the four firms licensed to provide high-speed wireless Internet access, it is the only one that has yet to launch its service commercially in a big way.
  
  YTLE, which will spend RM2.5 billion on the network, is tying up with South Korean electronics giant Samsung Electronics Co.
  
  The company will use its own money for the investment, managing director Tan Sri Francis Yeoh said in Kuala Lumpur yesterday.
  
  "We will start rolling out (the wireless infrastructure) immediately. We have identified 2,000 sites. We have mapped it. We know where we are going to put all the base stations already," he added.
  
  Unlike its rivals which have launched their wireless services in geographical stages, YTL will commercially launch its wireless services, comprising voice and data, only when it has nationwide coverage.
  
  "If you do it in stages, it won't work and it's not fair. This kind of technology doesn't work like that. It just won't work. Not enough equipment maker is going to support you. Not enough network people are going to support.
  
  "And then you are killing yourself. How many people are going to have this experience? For example, I go out of Kuala Lumpur. I cannot use (the service) already. Who are you kidding? Just KL for KL? It's not right to me," Yeoh said.
  
  When the government awarded the WiMAX licences, the four companies were expected to expand their network to cover 25 per cent of the population by end-March this year.
  
  However, it is unclear if any of them met the target.
  
  "At the end of the day, it's about achieving the national broadband objectives. Actually, our programme is ahead of the government's programme in terms of nationwide coverage," Yeoh said.
  
  In 14 months, YTLE will launch its wireless broadband services nationwide covering 70 per cent of the population.
  
  Yeoh was speaking to the media after the signing ceremony between YTLE and Samsung Electronics. Samsung has agreed to supply network equipment and handsets to YTLE.
  
  YTLE is one of the four companies awarded the licence to offer wireless broadband services using WiMAX technology. The others are Packet One Networks (M) Sdn Bhd (a unit of Green Packet), REDtone International Bhd and Asiaspace Sdn Bhd.
  
  WiMAX, short for worldwide interoperability for microwave access, is a telecommunications technology that provides transmission of data. It works like the current popular WiFi technology.
  
  A WiFi hotspot can cover a radius of tens of metres. In contrast, a WiMAX base station can cover several kilometres. The technology also promises the ability to surf the Internet from laptops while in a park, on a bus during a traffic jam, or anywhere in a residential neighbourhood.

Firstly, I am impressed with what's said by the boss. Yes I am.

However, I am not a WiMax fan because I simply believe that this is an extremely difficult business venture to profit from. This is my flawed view. And if I am wrong, what's new? :p2

Many have tried WiMax already. Have you?

If you have, how impressed are you?

Are you happy with the upload/download speeds? Are you happy with the connectivity?

Ok, so how good is WiMax as a business?

Yeah, from a business perspective, how good is WiMax? :D

Take the more recent news. Like for example, early this month, on FT.com Nokia dismisses WiMax prospects

• “I don’t see that WiMax is taking hold anywhere in a big way,” said Anssi Vanjoki, Nokia’s head of sales and manufacturing, at a Nokia launch event in San Francisco.
  “I don’t think the future is very promising [for WiMax]. This is a classic example of industry standards clashing, and somebody comes out as the winner and somebody has to lose.

Clearwire is one of the leader in US and some are extremely impressed with what Clearwire has to offer.

Ok, le't go back in time a bit.

A year ago, on Washington Post, Whatever Happened To Sprint's WiMax Venture?.

Sprint then had to merge with Clearwire: Sprint, ClearWire merging WiMAX operations.

Clearwire has agreed to merge with Sprint's wireless broadband division in a new, as yet unnamed, joint venture. The deal has financial support in the form of $1.05 billion from cable giant Comcast, $1 billion from chip champ Intel, $650 million from Time Warner Cable and its subsidiaries, and $500 million from search Brobdingnagian Google. That's a grand total of $3.2 billion of outside investments, plus whatever cash Clearwire and Sprint might bring to the table.

Don't expect Sprint itself to bring a fat dowry, though. The company has about $2.4 billion in cash equivalents, but also a staggering $20.5 billion debt load. Sprint is trying to sell off its Nextel unit, which was acquired for $35 billion in 2005, but reports on that effort say that Nextel is only worth about $5 billion today. And ClearWire is in a similar situation of more debt than cash, albeit on a much smaller scale.

Ahem.. big money business. :D

SmartMoney had the following article WiMax Venture Gets Weak Reception From Market

• There's a lot to take in at first glance, and there's no simple explanation for Wednesday's early rise and late-in-the-day drop. This is a complex project that's failed to get off the ground, and that accounts for plenty of investor skepticism. A WiMax deal last summer between Sprint and Clearwire was agreed upon, but never signed.
  But you don't need to be Alexander Graham Bell to understand that a 9% one-day pop in a stock that has nearly one-fifth of its shares held short can create a classic short squeeze, even if it's a squeeze of short duration.
  
  Philip Solis, an analyst at ABI Research, sees short-term profit taking at work, but says the implications for the new Clearwire go well beyond Wednesday's trading.
  
  "Sprint chose WiMax in 2006: it had the vision, and it pulled together an ecosystem of chipset and equipment companies. But there was one missing piece: money," he wrote in a Wednesday report. "They needed financing and the confidence of the investor community. The formation of this joint venture completes the picture."

Here is the two year chart of Clearwire or CLWR on yahoo's finance. Not impressive at all.

And if you click the Income Statement on that yahoo finance, you would understand the reasoning of the poor performance.

So how?

Capital expenditure is massive in this business and yet the return is lacking.

WiMax

Ok the news out, dude.

• KUALA LUMPUR, March 16 (Reuters) - Malaysia's telecoms industry regulator, the Malaysian Communications and Multimedia Commission, on Friday named four winners of licences to operate wireless broadband services.The firms are Bizsurf, which is 50-percent-owned by YTL E-Solutions (YTLE.KL: Quote, Profile , Research); MIB Comm, a unit of Green Packet Bhd (GRNP.KL: Quote, Profile , Research); Redtone International (RTON.KL: Quote, Profile , Research) and Asiaspace Dotcom, the regulator said on its Web site.WiMax, short for wireless interoperability for microwave access, allows super high-speed Internet access and file downloads from laptops, phones or other mobile devices over greater distances than previous technologies. Wimax can blanket entire cities with high-speed wireless connections and is a longer-range version of the popular WiFi technology used to connect to the Internet in public spaces like coffee shops. It is cheaper to set up and run than the high-speed 3G connection for mobile phones.

How now My Moo Moo Cow?

So news is out.

4 winners of wimax.

Err... time to show me the moola, eh?

So how big is the piece of cake? Anyone? What's the potential earnings?

At 0.93, ytle is valued at 1.181 Billion.
At 0.815, redtone is valued at 216.788 Million.
At 5.05, greenpacket is valued at 2.212 Billion.
err... who owns Asiaspace dotcom?

How???

Based at current valuations... can future earnings be used as a catalyst to boost the share price of these listed stocks?

The Source and Wimax

Posted on Star Biz:

http://biz.thestar.com.my/news/story.asp?file=/2007/2/15/business/16888018&sec=business

• Thursday February 15, 2007
  
  YTL-e, Green Packet emerge as WiMAX frontrunners
  
  By C.S.TAN
  
  PETALING JAYA: YTL e-Solutions Bhd (YTL-e) and Green Packet Bhd are the frontrunners to secure WiMAX licences, according to sources yesterday.
  
  WiMAX is a new standard for wireless broadband that covers long distances. Securing that spectrum would enable the companies to become full-fledged cellular companies (celcos) that can offer voice, data and video services on mobile phone networks.
  
  Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik told the media last month he would announce the winners of the WiMAX spectrum not later than the end of this month.
  
  However, he also indicated that while up to four WiMAX licences may be available, he might announce two winners this month and another two later.
  
  YTL-e and Green Packet groups are believed to be successful in their applications for WiMAX but it is not clear if both are among the two winners to be announced this month.
  
  It is also not clear if DiGi.Com Bhd would be one of the winners. One of the issues it faces is that Telenor of Norway owns 61% of DiGi although foreign companies are currently allowed to own up to only 49% of local telecoms firms.
  
  Under Telenor, DiGi has been competitive and its network is hugely popular, as seen from its high subscriber growth.
  
  Speculation was rife in the stock market yesterday that YTL-e and Green Packet would win the WiMAX spectrum. YTL-e shares surged 12 sen to 57 sen on volume of 86.1 million shares while Green Packet jumped 15 sen to RM5.25 on a volume of 1.6 million shares.
  
  Both groups submitted their applications through their member companies that are licensed service providers, which qualify them to bid for WiMAX spectrum.
  
  YTL-e announced in late December it would subscribe to new shares in Bizsurf (M) Sdn Bhd, giving it a 50% stake in the company.
  
  Bizsurf is one of 17 licensed service providers that have applied for and are being considered for the 2.3GHz spectrum for WiMAX deployment.
  
  YTL-e would pay RM1.3mil cash for the 50% interest in Bizsurf. This is a small sum for YTL-e, which reported in its last financial results that it held RM167.8mil cash.
  
  A member of the YTL group, the Mesdaq-listed YTL-e is mainly engaged in developing technology companies and services.
  
  Green Packet's bid for WiMAX is through MIB Comm Sdn Bhd, which is 55% owned by Packet One International Sdn Bhd, a subsidiary of Green Packet.
  
  Packet One bought the MIB Comm stake in December for RM6mil cash, on condition that an additional RM3mil would be paid to the vendors if the company secured the 2.3GHz spectrum.
  
  MIB Comm holds several licences from the Malaysian Communications and Multimedia Commission (MCMC) that would enable Green Packet to deploy its SONmetro wireless broadband infrastructure in the country.
  
  Green Packet is currently installing its SONmetro infrastructure in the Klang Valley that can deploy broadband services using fourth-generation (4G) technology and long-range WiFi coverage. The group's infrastructure would be enhanced if it secures a WiMAX licence.
  
  The company is also cash-rich, reporting it had RM125mil in cash at end-September last year. That would have been boosted by a private placement in November of new Green Packet shares issued at RM4.50 each, which raised RM182mil cash.
  
  It would thus have over RM300mil in cash.
  
  “It would be a red packet for Green Packet for the Chinese New Year if they get the WiMAX licence,” said a fund manager.
  
  Green Packet, with a market value of over RM2bil, is the largest company on the Mesdaq Market. The company is led by chief executive officer Puan Chan Cheong.
  
  The issue of WiMAX licences to corporates that have the resources and technology would be a step towards achieving the Government's objective of raising the penetration rate of broadband subscription and usage.

How?