Key Highlights:
- 2Q10 revenue increased by 59% to RM90m over 2Q09, total revenue for 1H10 is RM177m
- Continue to narrow losses Q-o-Q with net loss reduced by 4% from 1Q10
- Operating expenses percentage over revenue decreased by 19% from 2Q09
- 2Q10 revenue for Solutions increased 31% over 2Q09, driven by strong WiMAX devices sale
- Total Ending Subscribers for 4G WiMAX Operator P1 as at 2Q10 is 196,000
- Network improvement initiatives reduced churn substantially from 9% to 3% from 4Q09
Kuala Lumpur, Monday, 16 August 2010: Bursa Malaysia Main Market listed Green Packet Berhad, (“the Group”); today reported its second quarter financial results for this year, which it says is a reflection of the effectiveness of the Group’s ongoing business strategy.
Group revenue for the second quarter of 2010 was RM90million, an increase of 59% over the second quarter of 2009. The Group’s operating expenses had increased from RM85m to RM124m from the same period last year mainly due to infrastructure investments for P1. However, net loss has decreased 4% since 1Q10 with the Group’s continuing efforts to narrow its losses with cost reduction initiatives.
The Solutions business 2Q10 revenue has increased 31% compared with 2Q09. This is mainly attributable to strong WiMAX devices sales resulting from rapid and growing deployments of WiMAX networks globally. The Group expects an even better performance for its Solutions business moving forward with most of its sales funnel conversion cyclically taking place in the second half for both devices and software solutions.
In the first half of the year, the company has focused on fulfilling its commitment to deliver best-in-class network performance and a consistently high level of service and customer satisfaction by its 4G WiMAX Operator business, Packet One Networks (“P1”).
According to CC Puan, Group MD and CEO of Green Packet Berhad, ensuring that P1’s network is at its optimum is a big part of P1’s competitor strategy.
He says, “Investment in our network quality is an essential defensive strategy because it ensures we meet our customers’ expectations thus improving customer acquisition and retention. It is also an important offensive strategy to make our proposition and delivery difficult to match.”
P1 ended the second quarter with cumulative subscribers of 196,000 with 21,000 new subscribers added during the quarter even with the slowing down of subscriber acquisition activities while the company completes its network improvement exercise which concluded in June. Its network coverage had also increased from 35% population coverage at the end of last year to 40%, and believes it is on track to reach 45% by the end of 2010.
P1’s partnership with SK Telecom, Korea’s leading mobile Telco, is expected to boost its strategy to optimize network performance and customer satisfaction. SK Telecom has taken a 25.8% stake and injected US$100m (RM323m) into P1, and would further provide technical and operational expertise and resources.
“After two years of operation, we have a clear handle on the relationship between network coverage and promotional activity versus the resulting customer acquisition rates. We eased our foot on the accelerator in terms of customer acquisition until our network is operating at its competitive best, “our foot is definitely back on the accelerator,” Puan says.
He went on to explain that P1’s strategic focus on network performance during the first half of this year has successfully decreased churn rates from 9% to 3% from 4Q09. In this second half, P1 would leverage its collaboration with SK Telecom to enhance network coverage and performance, and aggressively ramp up customer acquisition. Puan believes that securing a bigger subscriber base to extend P1’s lead would be the best move forward in view of increasing competition, and would pave the way for more rapid increase in profitability thereafter.
Speaking on the competitive market for WiMAX operators in Malaysia, Puan says that P1’s 2-year head start, and having stress-tested its network with a large base of active subscribers is a competitive advantage that cannot be undermined as a positive user experience is not just about how wide the coverage is as P1 had learned. On some concerns over LTE being a threat to WiMAX, Puan explains that operators are not technology bias and would choose the fastest, most reliable, and most economically feasible technology to best serve their customers today. P1’s technology roadmap and existing back-end infrastructure has the advantage of being easily upgradeable to either WiMAX16m or LTE advance (TD-LTE) at a manageable cost.
Forward looking statements
This news release may contain forward looking statements by Green Packet Berhad that reflect management’s current expectation, beliefs, hopes, intentions or strategies regarding the future and assumptions in light of currently available information. These statements are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially from those discussed in the forward looking statements. Such statements are not and should not be construed as a representation as to the future performance or achievements of Green Packet Berhad and Green Packet Berhad assumes no obligation to update any such statements.
INCOME STATEMENT
|
