KUALA LUMPUR (Jan 27): MAXBIZ CORPORATION BHD [] expects profit margin of between 5% and 15% from the fibre network connection (FTTx) project, estimated to cost RM5,100 for each connection to a house and office.
The company, queried by Bursa Malaysia Securities Bhd several times over its announcement of a letter of intent (LOI) for the project totaling RM510 million from Fibre-N Sdn Bhd (FNSB), had on Friday provided the possible profit margins.
“The LOI that was received by Maxbiz states 100,000 FTTx homes and office connections and the price per connection is RM5,100 hence the amount of RM510 million is derived, the contract value would be determined when the LOI becomes a letter of award (LOA),” it said.
FTTx is a broadband network architecture using optical fibre to replace all or part of the usual metal local loop used for the last mile telecommunications.
On Jan 9, Maxbiz said FNSB had a contract for 100,000 FTTx connections and the LOI was for Maxbiz to be one of companies developing the fibre network connection project.
Maxbiz had then stated it received a LOI and it would be working towards converting it to a LOA.
In the latest announcement, Maxbiz said it would be informed of the actual number of connections upon confirmation by FNSB after the submissions expected in February 2012.
“Based on quotations from similar projects, and the price of RM5,100 a profit margin 5% to 15% is acheivable, 5% being the lowest and the 15% being the best case scenario.
“The profit margin is dependent on the logistics, if the buildings assigned are in close proximity to each other, the profit margin would be better because of the time and labour factor,” it said.
Maxbiz said that as at any start of a project, the cost of equipment or rental would lower the profits but with the continuation of the project, the margin was expected to increase due to re-utilisation of the sub-contractors and materials.
“Maxbiz expects to complete the study and submission to FNSB by the end of February 2012. The company is already engaged in discussions with FNSB on the project and is on-going,” it said.
The company, queried by Bursa Malaysia Securities Bhd several times over its announcement of a letter of intent (LOI) for the project totaling RM510 million from Fibre-N Sdn Bhd (FNSB), had on Friday provided the possible profit margins.
“The LOI that was received by Maxbiz states 100,000 FTTx homes and office connections and the price per connection is RM5,100 hence the amount of RM510 million is derived, the contract value would be determined when the LOI becomes a letter of award (LOA),” it said.
FTTx is a broadband network architecture using optical fibre to replace all or part of the usual metal local loop used for the last mile telecommunications.
On Jan 9, Maxbiz said FNSB had a contract for 100,000 FTTx connections and the LOI was for Maxbiz to be one of companies developing the fibre network connection project.
Maxbiz had then stated it received a LOI and it would be working towards converting it to a LOA.
In the latest announcement, Maxbiz said it would be informed of the actual number of connections upon confirmation by FNSB after the submissions expected in February 2012.
“Based on quotations from similar projects, and the price of RM5,100 a profit margin 5% to 15% is acheivable, 5% being the lowest and the 15% being the best case scenario.
“The profit margin is dependent on the logistics, if the buildings assigned are in close proximity to each other, the profit margin would be better because of the time and labour factor,” it said.
Maxbiz said that as at any start of a project, the cost of equipment or rental would lower the profits but with the continuation of the project, the margin was expected to increase due to re-utilisation of the sub-contractors and materials.
“Maxbiz expects to complete the study and submission to FNSB by the end of February 2012. The company is already engaged in discussions with FNSB on the project and is on-going,” it said.
