REDtone seeks WiMAX licence for peninsula

TELECOMMUNICATIONS service provider REDtone International Bhd (0032)remains hopeful of securing a broadband wireless spectrum licence for Peninsular Malaysia.

REDtone, which has a WiMAX 2.3Ghz spectrum licence for Sabah and Sarawak, said it has proven its success in rolling out the services for consumers there and would like to replicate the success targeting corporate clients in Peninsular Malaysia.

"We believe we should be given a chance in Peninsular Malaysia as customers are demanding for more such services to be offered here," its group chief executive officer Zainal Amanshah told reporters during a media briefing in Petaling Jaya, Selangor, yesterday.

He said the company had exceeded the 25 per cent population coverage in Sabah and Sarawak as set by the authorities, but decline to elaborate further, citing regulatory stipulations.
"We are in the process of applying for the licence (for Peninsular Malaysia) and are still in talks with the Malaysian Communication and Multimedia Commission," he said.

It is understood that licence application will be for the spectrum range between 2.5Ghz and 3.5Ghz.

Meanwhile, the company told Bursa Malaysia yesterday that it made a second quarter net profit of RM1.58 million against a revenue of RM21.2 million for the quarter ended November 30 2009.

This was a reversal from a year ago, when it posted a net loss of RM 719,000 against revenue of RM21.6 million for the same period.

The stronger performance for its recent second quarter results was driven by the local growth in its broadband services and uptake for its discounted call offerings in China.

"The business from China currently contributes 30 per cent to the overall group's revenue. We hope to increase this to 50 per cent next year," said group managing director Wei Chuan Beng.

This will be done via organic growth for its discounted voice services in Shanghai targeting the consumer segment. It currently has one million customers and sees growth of 2 per cent each month.

REDtone International also wants to venture into the distribution of mobile Internet device and 3G related services in China. It plans on doing so via acquisitions and is now in talks with several potential parties.

China has some 600 million 2G users and the three dominant telcos there are targeting to have some 30 million to 40 million 3G users in 2010, Wei added.

The group aims to achieve a net profit of RM7 million, against revenue of between RM88 million and RM90 million for its fiscal year ending 2010.

Meanwhile, the company will continue to spend RM10 million as part of its annual capital expenditure and plans to raise some RM41.5 million from its rights issues exercise, to be used mainly to set-up broadband infrastructure.