YTL Comms to be profitable soon?
By Goh Thean Eu April 4, 2014
- YTL Comms CEO optimistic of breaking even, declines to say when
- Plans to launch LTE in near future, Samsung the expected vendor
YTL Communications Sdn Bhd, a loss-making wireless broadband service provider, is optimistic that its business will be in the black soon.
“We currently have more than one million subscribers on the back of a very healthy average revenue per user (ARPU), so healthy that we feel very good about breaking even soon,” its chief executive officer Wing K. Lee (pic above) told Digital News Asia (DNA) after the official launch of its #YesToRio online game contest on April 3.
YTL Comms is a wholly-owned unit of YTL Power. It provides wireless communications services under the brand name YES.
While Lee was reluctant to commit to a date for when the company will break even, its recent financial results show significant improvement.
Based on YTL Power Bhd’s filings to Bursa Malaysia, YTL Comms more than doubled its revenue to RM445.64 million for the fiscal first half year ended Dec 31, 2013. The same period a year ago, YTL Comms posted revenue of RM219.3 million.
Also, during this six-month period, YTL Comms registered a pre-tax loss of RM77.87 million, a significant improvement compared with the RM137.72 million pre-tax loss in the same period a year ago.
[RM1 = US$0.31]
“The continued growth in its subscriber base has resulted in an increase in revenue and lower losses accorded in this segment,” YTL Power said in its filing to the regulator.
While industry observers credit the 1BestariNet project for both the jump in subscribers and higher ARPU Wing referred, Lee said this is not true. "The [more than] one million subs excludes 1BestariNet.
"We treat (and count) 1BestariNet as a separate vertical -- rightfully so, as we have provisioned multiple millions of users for 1BestariNet alone," he claimed.
1BestariNet is a project that will connect all 10,000 schools in Malaysia with high-speed Internet based on YTL Comms 4G WiMAX network.Bundled with the connectivity are access devices such as Chromebooks and a cloud-based Virtual Learning Environment with YTL using a UK-built solution called Frog that it has a 57% stake in as of end-2012. It initially paid US$3.4 million (RM11.1 million) for a 20% stake in 2011.
Lee said that the company will also be making announcements on its LTE (Long-Term Evolution) or 4G (Fourth Generation) plans in the near term.
Industry observers expect its incumbent vendor, Samsung, to remain in the picture and provide the LTE infrastructure. Lee declined to confirm or deny this, but said: "We are not ready to openly discuss our LTE strategy -- that will be helping our competitors a bit too much."
“When we designed our network, we designed it with [this] upgrade in mind. To upgrade to LTE is very simple; all we need to do is to add in a channel card,” he claimed. "We expect our LTE footprint to fully leverage the strength what we have -- a 4G all-IP (Internet Protocol) footprint that has over 85% population coverage across the nation."
YTL Comms was among the eight companies awarded the LTE spectrum in late 2012. The other companies include Celcom Axiata Bhd, DiGi.Com Bhd, Maxis Bhd, Packet One Networks (Malaysia) Sdn Bhd, Puncak Semangat Sdn Bhd, REDtone International Bhd and U Mobile Sdn Bhd.
Celcom Axiata, Maxis, DiGi and U Mobile appear to be more aggressive in their LTE rollout. Celcom said it plans to have more than 2,000 LTE sites, while DiGi expressed its plans to have more than 1,500 LTE sites by end of this year. Maxis, which has set aside RM1.1 billion of capital expenditure (capex) this year, said it will spend a significant amount of this capex to expand its LTE coverage.
Meanwhile, Lee says YTL Comms has built a wide network and its 4G network now covers 85% of the population, and that it has started to make inroads into East Malaysia. Its networks are currently running on WiMAX technology.
“Recently, we started to introduce our service in Sabah [in East Malaysia]. So, right now, the only state that we have not covered is Sarawak. But it won’t be long; we will be making announcements on that soon,” he said.
“We have invested more than RM2 billion over the past three-and-a-half years, so to be able to achieve breakeven in the not-so-distant future is a remarkable feat,” he added.
For Lee, the #YesToRio campaign has multiple objectives, including expanding its subscriber base, boosting its ARPU and branding.
“We want to get our brand out, branding is very important to us and this is one of the ways to build our brand. Also, we want to make sure that we reward our subscribers,” he said.
#YesToRio is a nationwide online game contest by YES which runs from now until May 31. Throughout the contest period, three top scorers of each game of the week will be rewarded with exclusive sports merchandise, including original jerseys autographed by some of the world’s most popular footballers, YTL Comms said.
By the end of the contest period, the top 30 participants on the overall leaderboard with the highest accumulated scores will be invited to the final event where they will battle it out for the two grand prizes – all-expenses paid trips to watch the final match of the World Cup 2014.
The contest features three web-based football games, namely 'What-A-Save,' which is now available, followed by 'The Big Match' and 'G-G-G-Goal' which will be released later during the contest period.
For YES subscribers, they get to enjoy an additional 10% bonus for every round of the game on top of their accumulated score points. Furthermore, there are reload bonus points available for each top-up or purchase of a YES Valuepack, Datapack, Campuspack or SuperBooster.