Green Packet awards full turnkey contract to ZTE
Posted on May 5, 2010, Wednesday
KUCHING: Green Packet Bhd (Green Packet) under its subsidiary Packet One Networks (Malaysia) Sdn Bhd (P1) has awarded a full turnkey contract to ZTE (Malaysia) Corporation Sdn Bhd (ZTE).OSK Research Sdn Bhd (OSK Research) said in its research report that the turnkey contract was for the design, permitting, site acquisition, CME works, planning, construction, survey, supply, installation, implementation and maintenance of the 4G WiMAX Network for Phase 3.
The contract was worth US$76.8 million for the extension of the network coverage, the research house said. The contract with ZTE underscored P1’s target of achieving over 55 per cent population coverage by the end of 2011 from 45 per cent currently.
Furthermore, the contract was forming part of its Phase 3 network coverage expansion with 1,200 sites earmarked for completion by the year 2012, the research firm highlighted.
It added the focus would be on the relatively under-served areas within the peninsula to beef up network capacity in the three key states of Penang, Kuala Lumpur and Johor, so as to ensure that the existing subscribers’ experience was not compromised with the addition of new subscribers.
The research house believed that funding would not pose any issue to P1 as it had access to vendor financing of US$150 million from ZTE as of January, 2010. Only US$50 million of the allocation had been drawn to date while the remainder would be utilised over the next two years, it pointed out.
OSK Research stated the contracted amount came within expectations and as guided by management’s capital expenditure ranging from RM300 million to RM350 million per annum over the next two years as a means of ramping up coverage.
Reporting on the performance of the company, HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) said the fourth quarter of 2009 (4Q09) revenue jumped 33 per cent quarter-on-quarter (q-o-q) due to higher revenue from its voice solutions division.
The research house added Green Packet’s voice revenue increased 73 per cent q-o-q due to an increase in domestic traffic.
In general, it suggested revenue for 2009 jumped 180 per cent on the back of the performance of P1 as it added 128,000 subscribers in 2009 after a sluggish start in 2008 with only 11,000 subscribers.
Going forward, the company was expected to grow by 69 per cent in 2010 and 48 per cent in 2011, the research firm said.
It was of the opinion that P1 would continue to grow given its low subscriber base of 139,000 as the company was expected to add 12,000 subscribers a month in 2010, increasing to 15,000 per month in 2011.
Furthermore, it was looking to raise coverage to 45 per cent of the population in 2010, the research house revealed.
Meanwhile, it mentioned Green Packet’s solutions division was projected to grow in revenue by 160 per cent in 2010 and 29 per cent in 2011 driven by the sale of WiMAX modems.
The research house was optimistic that this division would see a healthy growth from the sale of seamless connectivity solutions from 2012 onwards due to congestion of outdoor networks.
It added P1 would be investing RM350 million in 2010 and RM250 million in 2011 to expand its coverage and capacity.