KUALA LUMPUR: Star Publications (M) Bhd is venturing into the provision of free wireless broadband service in Sweden together with ACE Market-listed MNC Wireless Bhd.
It is learnt that Star holds a 15% equity stake in IntJoors Sverige AB (Joors), which will launch the world’s first free high speed mobile Internet service in Sweden.
In a statement yesterday, MNC Wireless said it has, via its associate company Joors, initiated the launch of “Joors”, said to be the world’s first free broadband service.
“The shareholders of Joors make up some of the best minds in telecommunications, advertising and media in the Nordic and Asian regions,” it said, adding that Joor’s investors include Star.
According to the statement, the enabling technology and technical platforms for the Internet service was designed and developed by MNC Wireless, while the mobile broadband network is provided by TeliaSonera Mobile Networks AB, the largest telco in Sweden, on a wholesale basis.
MNC Wireless said users of the Internet service will need to pay a one-time start-up fee for registration and will be provided with free Internet access “for normal usage, for every 30 days at a speed up to 10 Mbps.” Users requiring more data capacity will have the option to purchase extra data at competitive prices.
The business model of Joors mobile broadband will be supported by advertising revenue.
This is the main reason Star is venturing into the project, says a source, who added that the move is to diversify the company’s earnings portfolio.
Media analysts said such a business model could be likened to the free newspaper model, in which the publishers do not make a profit from selling newspapers, but from advertisements.
When the number of subscribers to the free broadband service rises, it could be a tool to attract advertisers.
Since the change of guards in Star last year, the publication group seems to have adopted a more aggressive approach to diversify its media business.
Datuk Vincent Lee, who took over as executive deputy chairman last March, is also the largest shareholder of MNC Wireless with a 39.5% stake. Star made four acquisitions last year, which is rather aggressive considering the publishing group’s conservative approach of hoarding cash in the past.
Last month, it bought a 83.61% stake in publisher Red Tomato Media Sdn Bhd, which publishes a free Chinese weekly tabloid in the Klang Valley and Penang, for RM1.49 million. In the middle of last year, it acquired 51% of LI TV Holdings Ltd, which operates the Life Inspired lifestyle television channel, for RM35 million, and a 4.99% stake in Catcha Media Bhd, a magazine publisher and online media firm, for RM4.97 million.
The group also took up an 80% stake in radio station operator Capital FM Sdn Bhd for RM15 million.
Despite its diversification efforts, the company’s English daily, The Star, is still the bread winner.
For 9MFY11 ended Sept 30, print and new media accounted for 80% or RM611 million of Star’s revenue, followed by events and exhibitions 15%, while radio barely hit 5%.
Star has a cash pile of RM550 million compared to its borrowings of RM308.8 million.
The company’s net cash position would enable it to continue on its acquisition trail, although analysts noted that few of the acquisitions have so far given a major boost to Star’s earnings.
This article appeared in The Edge Financial Daily, January 18, 2012.
It is learnt that Star holds a 15% equity stake in IntJoors Sverige AB (Joors), which will launch the world’s first free high speed mobile Internet service in Sweden.
In a statement yesterday, MNC Wireless said it has, via its associate company Joors, initiated the launch of “Joors”, said to be the world’s first free broadband service.
“The shareholders of Joors make up some of the best minds in telecommunications, advertising and media in the Nordic and Asian regions,” it said, adding that Joor’s investors include Star.
According to the statement, the enabling technology and technical platforms for the Internet service was designed and developed by MNC Wireless, while the mobile broadband network is provided by TeliaSonera Mobile Networks AB, the largest telco in Sweden, on a wholesale basis.
MNC Wireless said users of the Internet service will need to pay a one-time start-up fee for registration and will be provided with free Internet access “for normal usage, for every 30 days at a speed up to 10 Mbps.” Users requiring more data capacity will have the option to purchase extra data at competitive prices.
The business model of Joors mobile broadband will be supported by advertising revenue.
This is the main reason Star is venturing into the project, says a source, who added that the move is to diversify the company’s earnings portfolio.
Media analysts said such a business model could be likened to the free newspaper model, in which the publishers do not make a profit from selling newspapers, but from advertisements.
When the number of subscribers to the free broadband service rises, it could be a tool to attract advertisers.
Since the change of guards in Star last year, the publication group seems to have adopted a more aggressive approach to diversify its media business.
Datuk Vincent Lee, who took over as executive deputy chairman last March, is also the largest shareholder of MNC Wireless with a 39.5% stake. Star made four acquisitions last year, which is rather aggressive considering the publishing group’s conservative approach of hoarding cash in the past.
Last month, it bought a 83.61% stake in publisher Red Tomato Media Sdn Bhd, which publishes a free Chinese weekly tabloid in the Klang Valley and Penang, for RM1.49 million. In the middle of last year, it acquired 51% of LI TV Holdings Ltd, which operates the Life Inspired lifestyle television channel, for RM35 million, and a 4.99% stake in Catcha Media Bhd, a magazine publisher and online media firm, for RM4.97 million.
The group also took up an 80% stake in radio station operator Capital FM Sdn Bhd for RM15 million.
Despite its diversification efforts, the company’s English daily, The Star, is still the bread winner.
For 9MFY11 ended Sept 30, print and new media accounted for 80% or RM611 million of Star’s revenue, followed by events and exhibitions 15%, while radio barely hit 5%.
Star has a cash pile of RM550 million compared to its borrowings of RM308.8 million.
The company’s net cash position would enable it to continue on its acquisition trail, although analysts noted that few of the acquisitions have so far given a major boost to Star’s earnings.
This article appeared in The Edge Financial Daily, January 18, 2012.
