REDTone Mobile appoints new CEO

KUALA LUMPUR (April 30): Mobile virtual network operator REDtone Mobile Sdn Bhd has appointed a new chief executive officer, Farid Yunus.

In a statement Monday, REDTone said Farid is part of Celcom Axiata Bhd's senior management team, and was seconded to the company to help in the MVNO's next phase of growth.

“Prior to his secondment to REDtone Mobile, Farid was Celcom Axiata’s Chief Strategy and Business Transformation Officer, responsible for TECHNOLOGY [] and market strategies and business planning,” it said.

REDTone said Farid was an industry analyst with the Yankee Group in London, focusing on mobile markets and carriers in Europe, Middle East and Africa before he joined Celcom Axiata.

He has 14 years of experience in the mobile industry, and holds a Masters degree from the University of Leeds, and a Bachelor of Science in Telecommunications from Ohio University, it said.



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Redtone posts 3Q profit on higher turnover, non-operating gains

KUALA LUMPUR (April 24) : REDTONE INTERNATIONAL BHD [] posted profits in the third quarter against losses a year earlier as the telecommunication firm registered higher revenue and non-operating gains.

In a statement to the exchange on Tuesday, Redtone said net profit came to RM427,000 in the quarter ended February 29, 2012 versus a net loss of RM1.93 million previously. Revenue was up 13% to RM23.58 million from RM20.96 million.

The firm’s non-operating income in the 3Q comprises mainly subsidiary-disposal gains, according to notes accompanying its financials.

Redtone said cumulative nine-month net loss narrowed to RM324,000 from a net loss of RM3.71 million a year earlier as revenue gained 27% to RM84.24 million from RM66.43 million.



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Redtone jumps on TM broadband pact

Redtone International Bhd, a Malaysian telecommunications company, jumped 7.7 per cent to 28 sen in Kuala Lumpur trading at 9.32am, the steepest increase since January 9.

The company signed a high-speed broadband agreement with Telekom Malaysia Bhd, it said in a regulatory filing. -- Bloomberg



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REDtone narrows losses in 2Q

KUALA LUMPUR: REDtone International Bhd has managed to narrow its losses by 91%, with higher contributions from its data projects.

For its second quarter ended Nov 30 (2QFY12), the company posted a net loss of RM82,000 compared with a net loss of RM915,000 in the same quarter last year.

In a statement to Bursa Malaysia yesterday, REDtone said its revenue for 2Q increased by 67% to RM35.96 million from RM21.56 million a year ago, mainly due to higher revenue contributions from its data business.

The Edge weekly reported that REDtone had recently entered into a 4G/LTE network collaboration with two local telecommunication companies to rent out portions of its bandwidth, which could spark a turnaround once the collaboration kicks in.

Industry observers are expecting REDtone, which has been loss-making since 2008, to return to the black when its collaboration with these telcos takes off.

For the six months to Nov 30, REDtone posted a net loss of RM751,000 on revenue of RM60.66 million compared with a net loss of RM1.78 million on revenue of RM45.47 million in the previous corresponding period.

For the six months ended Nov 30, its data and broadband recorded a revenue of RM17.4 million compared with RM13.2 million for the 12 months ended May 31, 2011 (FY11).

REDtone added that by extrapolating the six months results, its increase in revenue from data is about 167%.

The companies that REDtone might be leasing parts of its 4G/LTE spectrum to are Maxis Bhd, U Mobile Sdn Bhd, DiGi.Com Bhd and Celcom Axiata Bhd.

REDtone did not name the party it had signed the deal with but said it was more than one telco. Sources say that DiGi and Celcom are possible partners of REDtone.

REDtone had said it would make an announcement on the matter once the Malaysian Communications and Multimedia Commision (MCMC) finalises the positioning of each spectrum block.

According to a source, REDtone’s rationale for entering into such an agreement is to raise capital to fund the eventual rollout of its own 4G/LTE network, which requires a large amount of capital expenditure.

Market talk of REDtone’s tie-up has caused its share price to gradually increase over the past three weeks.

With a closing price of 32.5 sen yesterday, its shares have increased by 27.5% from 25.5 sen on Dec 28.

Based on its closing yesterday, REDtone had a market capitalisation of RM152.85 million.

Observers say that because REDtone is relatively small compared to other larger telco players, funding may prove to be an issue.

As at Nov 30, it had cash reserves of RM20.56 million and investments of RM3.53 million while its total borrowings amounted to RM2.91 million.

Since 2010, there has been a number of collaborations between telco players, starting with Maxis signing a deal with Telekom Malaysia Bhd (TM), followed by Packet One Networks (M) Sdn Bhd (P1) with TM, and DiGi with Celcom.

In 2011, Maxis signed a deal with U-Mobile to share its 3G infrastructure.

In December 2010, nine companies received a letter of award from the MCMC concerning their specific 4G spectrum blocks. The nine are Celcom, Maxis, DiGi, U-Mobile, REDtone, P1, Asiaspace Sdn Bhd, YTL Communications Sdn Bhd and Puncak Semangat Sdn Bhd.

On its prospects, REDtone said repositioning itself from voice into data and broadband has shown encouraging results.


This article appeared in The Edge Financial Daily, January 19, 2012.

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RedTone International 2Q net loss RM82,000 vs RM915,000 yr ago

KUALA LUMPUR (Jan 18): REDTONE INTERNATIONAL BHD [] posted lower net loss of RM82,000 in the second quarter ended Nov 30, 2011 compared with the RM915,000 a year ago.

It said on Wednesday that revenue rose 66.7% to RM35.96 million from RM21.56 million mainly due to revenue contribution from data business. Loss per share was 0.02 sen compared with 0.23 sen.

“Group profit before taxation for 2Q FYE 2012 was RM130,000 as compared to loss before taxation of RM480,000 for the corresponding quarter (2Q2 FY2011). The improvement in the profit before tax of approximately 127% is mainly due to higher revenue contributed by data projects of approximately RM6.20 million,” it said.

RedTone said for the first half ended Nov 30, 2011, its net loss was RM751,000 compared with losses of RM1.78 million a year ago. Its revenue rose 32.8% to RM60.66 million from RM45.47 million

“For the six months ended Nov 30, 2011, the group's data and broadband recorded revenue of RM17.4 million as compared to RM13.2 million for the 12 months ended May 31, 2011 (FYE 2011). By extrapolating our actual six months results, the increase in revenue from data is approximately 167% as compared to FYE 2011.” It said.

RedTone said the group would continue to build on its corporate and SME customer base in order to achieve a critical mass. In addition, the group will also continue to bid for broadband projects initiated by the government projects and special projects for the provisioning of Wifi hotspots solutions.



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REDtone sells controlling stake in MVNO arm

KUALA LUMPUR : REDtone International Bhd has disposed a 65% stake in REDtone Mobile Sdn Bhd to two individuals for a token RM1 sum as part of a rationalisation exercise to improve the performance of its loss-making unit and free it to focus resources on other businesses.

In a statement yesterday, REDtone International chief executive officer Lau Bik Soon said Teh Beng Hock and Tee Yew Yaw will each hold 32.5% in REDtone Mobile, its Mobile Virtual Network Operator (MVNO) arm. REDtone Mobile would benefit from the entry of Teh and Tee who also own Elepoint Sdn Bhd, the largest reseller for mobile operator Celcom Axiata Bhd within the corporate segment in Malaysia.

“Teh and Tee have more than 15 years of experience and a deep understanding of the mobile business in the country. Together with REDtone’s expertise in the SMB/SME (small and medium-sized business/small and medium-sized enterprise) segment, we believe it’s a strong partnership that will be able to take the company to a new level of growth,” Lau said in the emailed statement.

In its statement to Bursa Malaysia, REDtone said Teh and Tee would be injecting RM350,000 into REDtone Mobile, which had RM2.63 million net liabilities and RM3.16 million net loss for FY ended May 31, 2011. REDtone Mobile will pay REDtone Technology Sdn Bhd RM10,000 a month for support services, research & development as well as customer billing services.

“The ‘new’ REDtone Mobile will be more vibrant with better distribution channels to extend the reach of its services, and with more appealing offerings,” Lau said. Following the share sale, REDtone International will still own 35% of REDtone Mobile, which does not own its own network but offers mobile phone services by leasing network capacity from mobile operators like Celcom.

REDtone, whose clientele is mainly from the SME segment, launched its MVNO services in 2009 and had invested some RM3 million into the business, the company said.

Lau said the new shareholders will help loss-making REDtone International improve the prospects of its data and broadband operations which is seen as a major contributor to the company’s financials in the year ending May 31, 2012.

In financial year ended May 31, 2011, REDtone International’s net loss widened to RM11.72 million compared with a net loss of RM5.41 million a year ago.

Besides divesting its stake in the mobile business, Lau said REDtone International has also put in place other initiatives to reverse its fortunes.



This article appeared in The Edge Financial Daily, January 4, 2012.



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REDtone Mobile gets new shareholders

REDtone International Bhd (REDtone) unit, REDtone Technology Sdn Bhd, has sold 65 per cent of its equity in REDtone Mobile Sdn Bhd (REDtone Mobile) to Teh Beng Hock and Tee Yew Yaw.

REDtone said the move to bring in new shareholders for REDtone Mobile, which offers Mobile Virtual Network Operator (MVNO) services, was part of its business rationalisation strategy as the group wanted to focus in businesses it was strong in.

Teh and Tee are shareholders of Elepoint Sdn Bhd, the largest Celcom re-seller for the corporate segment in Malaysia.

Chief executive officer Lau Bik Soon said new shareholders for REDtone Mobile were necessary to sharpen the company's focus and competitive advantage to make its MVNO services more appealing.

"Teh and Tee have more than 15 years experience and a deep understanding of the mobile business in the country. Together with REDtone's expertise in the small-and medium-sized enterprise segment, we believe it is a strong partnership
that will be able to take the company to a new growth level.

"The new REDtone Mobile will be more vibrant with better distribution channels to extend the reach of its services, and with more appealing offerings," he said, adding that REDtone expects to be profitable, moving forward.

He also said a new management would take over REDtone Mobile with immediate effect.

"A new and highly-experienced CEO will also come on board to run the company. We will now be able to better focus on growing our data and broadband business. We expect it to be the major contributor to the group's profit and revenue in financial year 2012," he said in a statement.

As an MVNO, REDtone Mobile rides on Celcom's digital network to offer mobile services to its customers who are primarily from the SME segment.

Besides divesting its stake in the mobile business, REDtone has put in place numerous other initiatives to strengthen its performance and turn the group around into a profitable entity.

These include further growing its profitable data and broadband business, working with other telecommunication service providers on joint projects that can leverage on its strength as a WiFi network builder and commercialising its proprietary technologies.

Meanwhile, in China, where its Shanghai operations were doing well, REDtone is considering expanding its customer loyalty pre-paid card business, he added. -- BERNAMA



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Telcos facing faster decline from voice

KUALA LUMPUR: While Maxis Bhd and Axiata Group Bhd have yet to announce third quarter (3Q) earnings, analysts reckon numbers will show data revenue gaining prominence over the money made from traditional voice services.

“The third quarter is very much a seasonal quarter as a result of the number of public holidays during the period. However, the main trend that is being seen so far is that revenue from voice continues to decline. Although this is expected, the rate at which the decline is occurring is faster than expected,” said an analyst.

As more of the telco revenue comes from data, the need for more spectrum and capital expenditure to upgrade infrastructure would become more pressing.

Maxis is expected to see some margin pressure as revenue from its voice segment continues to decline.

“This means that the government may come under pressure to announce the award of more spectrum to the players, more specifically the LTE/4G spectrum, soon.

Originally, the award was expected to come at the end of October, however now most are predicting it to happen during the first half of next year,” said an industry observer.

At the moment, the exact allocation of the 180 MHz LTE/4G spectrum is still up in the air as lobbying from industry players intensifies.

To recap, the nine companies that are in the running for the spectrum are Celcom Axiata Bhd, Maxis Broadband Sdn Bhd, DiGi Telecommunications Sdn Bhd, U-Mobile Sdn Bhd, Asiaspace Sdn Bhd, Packet One Networks (M) Sdn Bhd (P1), REDtone Marketing Sdn Bhd, YTL Communications Sdn Bhd and Puncak Semangat Sdn Bhd.

Although the LTE/4G spectrum will only be available for use from 2013 onwards, given the sensitivity of the subject, most of the telcos are adopting a “wait and see” approach before making a firm commitment on the matter.

This need for data has also sped up the trend of collaboration between the players with several partnerships taking place this year such as the network collaboration agreement between Celcom and DiGi. More recently, Maxis entered into an active 3G radio access network sharing agreement with U Mobile.

One of the first companies to launch a LTE/4G trial was Maxis, which successfully concluded a test during the middle of last year. For its upcoming 3Q results, analysts are expecting the numbers to fall within expectations, but there is a possibility that revenue from its voice could see a sharper-than-anticipated drop.

“Maxis is expected to see some margin pressure as revenue from its voice segment continues to decline. The company has been seen as having lost some of its postpaid market share to its competitors DiGi.Com and Celcom Axiata,” said an analyst.

While Maxis expects to see some contribution from its newly launched home broadband segment towards the end of the year, analysts are expecting the portion to still be small given its slightly later-than-expected rollout. To clarify, Maxis entered the home broadband business when it signed an agreement with Telekom Malaysia Bhd to ride on the latter’s high-speed broadband backbone.

“The segment is still only expected to contribute within the medium term,” said the analyst. However, analysts are also expecting Maxis’ upcoming results to show a greater proportion of its revenue to come from non-voice related segments, close to 50%, which is the highest in the industry.

Axiata’s results would largely depend on how well its unit Celcom performed during the quarter. This is given that its other big earnings contributor, Indonesian PT XL Axiata Tbk, had announced flattish 3Q numbers due to increased spending to boost its data network.


This article appeared in The Edge Financial Daily, November 29, 2011.



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Wei denies making exit from REDtone

KUALA LUMPUR: REDtone International Bhd co-founder Datuk Wei Chuan Beng clarified he is not cashing out from the telco despite his disposal of a 4.67% equity stake, or five million shares, at 35 sen each, some two weeks ago.

Wei, who is also the company’s managing director, said his shareholding in REDtone would increase to above 5% in short order.

“I am not cashing out. There was a local investor in the market who wanted a block of five million shares and I thought it was okay to place out these shares considering that I have about 15 million Iculs that I have yet to exercise, on top of the stock options,” Wei told The Edge Financial Daily.

“My interest in the company is very clearly and firmly entrenched. I’m not going anywhere,” he added. However, he declined to identify the investor who bought the shares via a direct deal.

There was no filing with Bursa Malaysia on the emergence of new substantial shareholders in REDtone as at press time.

Wei had ceased to be a substantial shareholder and currently holds a 4.66% equity stake in REDtone after the share disposal. The telco’s single largest shareholder is Datuk Wira Syed Ali Syed Abbas Al Habshee, who recently raised his stake to 28.2%, followed by Berjaya Corp Bhd (9.81%).

Wei: My interest in the company is firmly entrenched.

Syed Ali, via his investment vehicle Indah Pusaka Sdn Bhd, had been buying shares on the open market at between 16 sen and 34 sen recently.

Wei’s share divestment seems to have caught the right timing as REDtone’s share price rebounded from a low of 16 sen in late September to a peak of 34 sen on Oct 18 — the highest level since January last year. The counter retreated from its October peak in the past two weeks to close at 27.5 sen yesterday.

Year to date, the stock has surged nearly 45%.


This article appeared in The Edge Financial Daily, November 11, 2011.

REDTone deputy chairman ups stake

KUALA LUMPUR (Oct 31) : REDTONE INTERNATIONAL BHD []’s non-independent non-executive director cum deputy chairman Datuk Wira Syed Ali Syed Abbas Al Habshee saw his indirect interest increase to 130 million shares or 28.58%.

A filing with Bursa Malaysia on Monday showed that Indah Pusaka Sdn Bhd, in which he is deemed interest, acquired 12 million shares on Oct 25 for RM3.3 million. The shares were acquired at an average price of 27.5 sen in a direct deal.

The filing said he was deemed interested due to his interest in Indah Pusaka via Tema Juara Sdn Bhd pursuant to Section 6A of the Companies Act, 1965.

The company’s website said Syed Ali was appointed to the board of REDtone on July 28, as the deputy chairman.

KL shares end mixed

KUALA LUMPUR: Bursa Malaysia closed mixed today with the benchmark index recouping its earlier losses as key heavyweight counters staged a late rebound in line with the mixed trading on regional marts, dealers said.

The benchmark FBM KLCI rose 7.78 points, or 0.54 per cent, to close at 1,457.80, after opening 3.44 points better at 1,453.46.

The benchmark index moved between 1,448.12 and 1,457.80.

A dealer said the market saw late bargain hunting which managed to reverse the earlier easy trend.

"However, the players are still cautious ahead of tomorrow's meeting by European policymakers to resolve the eurozone debt crisis," he said.

The Finance Index rose 46.649 points to 13,147.14, Plantation Index added 31.86 points to 7,386.56 and the Industrial Index gained 21.30 points to 2,685.02.

The FBM Emas Index advanced 43.5 points to 9,928.19, FBM70 Index was up 50.25 points to 10,658.68 and FBMT100 jumped 50.77 points to 9,751.06.

The FBM Ace, however, eased 43.21 points to 3,973.69.

Decliners led losers by 373 to 299 while 289 counters were unchanged, 500 untraded and 26 others were suspended.

Turnover declined to 950.64 million worth RM1.075 billion from 1.238 billion shares worth RM1.3 billion yesterday.

Volume on the Main Market fell to 697.91 million shares worth RM1.044 billion from 936.677 million shares worth RM1.28 billion Monday.

Turnover on the ACE market declined to 182.04 million units valued at RM24.943 million from 193.184 million units valued at RM24.509 million previously.

Warrants fell to 67.022 million shares worth RM5.11 million from 105.430 million shares worth RM7.119 million yesterday

Among actives, REDtone International earned 1.5 sen to 29.5 sen and AirAsia rose four sen to RM3.88.

The Media Shoppe and Systech, however, fell one sen each to 9.5 sen and 11 sen respectively.

Of the heavyweights, Maybank added two sen to RM8.27, CIMB increased seven sen to RM7.26, Sime Darby earned 21 sen to RM8.85 and Petronas Chemical added three sen to RM6.19.

Consumer products accounted for 29.18 million shares traded on the Main Market; industrial products 205.09 million; construction 32.62 million; trade and services 187.84 million; technology 22.43 million; infrastructure 18.22 million; finance 106.112 million; hotels 672,9000 properties 72.69 million; plantation 21.61 million; mining 65,000; REITs 1.33 million; and closed/fund 52,900 -- BERNAMA

Market Commentary

The FBM KLCI index gained 7.78 points or 0.54% on Tuesday. The Finance Index increased 0.36% to 13147.14 points, the Properties Index dropped 0.10% to 938.06 points and the Plantation Index rose 0.43% to 7386.56 points. The market traded within a range of 9.68 points between an intra-day high of 1457.80 and a low of 1448.12 during the session.

Actively traded stocks include HARVEST-WA, HARVEST , MBSB-WA, MBFHLDG-WA, REDTONE, AIRASIA, TMS, REDTONE-WA, SYSTECH and HUBLINE. Trading volume decreased to 950.64 mil shares worth RM1075.97 mil as compared to Monday’s 1238.47 mil shares worth RM1313.79 mil.

Leading Movers were SIME (+21 sen to RM8.85), TENAGA (+19 sen to RM5.78), CIMB (+7 sen to RM7.26), IOICORP (+7 sen to RM5.10) and MAYBANK (+2 sen to RM8.27). Lagging Movers were YTL (-2 sen to RM1.49), GENTING (-3 sen to RM9.99), PBBANK (-2 sen to RM12.48), AMMB (-3 sen to RM5.84) and AXIATA (-1 sen to RM4.84). Market breadth was negative with 299 gainers as compared to 373 losers. -- JF Apex Securities Bhd

HDBSVR: KLCI to come under selling pressure, may test 1,445

KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) said the key FBM KLCI will likely come under selling pressures on Thursday, Oct 20.

“Technically speaking, the benchmark index could test and break below its immediate support level of 1,445 ahead,” it said.

HDBSVR said on the external front, sentiment is expected to turn cautious following news that it would not be easy for the European nations to come to an agreement on how to resolve the regional sovereign debt problems.

Reacting to this concern, major U.S. equity indices dropped between 0.6% and 2.0% at the closing bell last night.

Back home, stocks that may be of interest today include: (a) Redtone International, after its managing director said the telecommunications service provider might return to the black this year; (b) Harvest Court, whose managing director cum major shareholder has offered to buy the entire stake held by Affin Bank comprising 31.4m shares and 7.9m warrants at RM0.20 per share; and (c) BAT Malaysia, which is due to announce its financial results for the Jul-Sep quarter this evening.

Bullish tone for REDtone

Puchong: REDtone International Bhd, a telecommunications service provider, believes the worst is over and it might return to the black in the current financial year, boosted by revenue from its broadband business.

"This is definitely a turnaround year for REDtone. Barring unforeseen circumstances, we are likely to break even or be profitable this financial year (ending May 31 2012). As you know, we suffered a net loss of about RM11 million last year, so if we break even, it would mean an improvement of RM11 million ... that's a huge improvement," said its managing director Datuk Wei Chuan Beng in a Business Times exclusive.

The company suffered a net loss of RM11.7 million for the fiscal year ended May 31 2011 against a net loss of RM5.4 million a year ago.

REDtone has been posting net losses since its 2008 financial year and the market will be keenly watching its first-quarter results, due to be announced sometime this month, for an indication that the company has indeed made a turn for the better.

Wei said the wider net loss previously was partly due to the roll-out of its wireless broadband network in East Malaysia, impairment of past investments in China and provision of doubtful debts, among others.

"Our core businesses are showing positive signs. Voice business has been profitable for many years.

"Our data business is also profitable now, our WiMAX broadband business in East Malaysia is very close to breaking even, and that's a very good progress."

He said its broadband business was in an investment mode over the past few years, especially in East Malaysia.

REDtone has now stabilised and Wei believes it is at a tipping point where the business can be profitable.

REDtone now offers broadband services to close to 10,000 residential customers and 1,000 companies.

Wei said that broadband will be a major growth driver for the firm.

"Currently, the business contributes about 20 per cent to its overall revenue. Moving forward, especially when the LTE spectrum is awarded, we are looking at revenue contribution of more than 50 per cent in three to five years."

REDtone is also banking on its new board of directors to push it to the next level.

In July, it announced the appointments of Datuk Wira Syed Ali Syed Abbas Al Habshee as its deputy chairman and Datuk Ismail Osman as its senior executive director.

"With the new board (members), I believe REDtone now has all the ingredients needed - the people, the technology, and the experience - to take itself to the next level and become one of the big boys in the telecommunications industry," said Ismail.