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Puncak Semangat eyes Fibrecomm stake

Written by Nadia S Hassan of theedgemalaysia.com
Thursday, 12 July 2012 17:00

KUALA LUMPUR: Puncak Semangat Sdn. Bhd., a company linked to tycoon Tan Sri Syed Mokhtar Al-Bukhary, has made overtures to Tenaga Nasional Berhad (TNB) for its 49% stake in wholesale broadband service provider Fibrecomm Network (M) Sdn. Bhd., industry said.

“Puncak Semangat is said to have already made the offer toTenaga to buy the stake,” said an executive. However, the exact pricing of the stake is no known at this point in time.

The remaining 51% in Fibrecomm is owned by Telekom Malaysia Berhad (TM), the dominant broadband service provider in the country. Although a relative newcomer to the telecommunications scene, Puncak Semangat is already making inroads into the industry.

Under the recent allocation for the LTE/4G spectrum, Puncak Semangat walked away with the lion’s share of 30MHz, while the well-known players got 20MHz. Puncak Semangat is also said to be among the front runners for the acquisition of the country’s first internet service provider Jaring Communications Sdn. Bhd.

Puncak Semangat is also in discussion with the government to spearhead the digital terrestrial television broadcasting project. If the acquisition of the Fibrecomm stake pans out, it would then allow Puncak Semangat access to an extensive fibre netweok, and a foot in the door for the wholesale market.

The combination of spectrum and fibre would then turn the nascent operator into a serious contender for market share. Fibrecomm is in the business of telecommunications network services, with a focus on companies, and small and medium enterprises.

The company operates a fibre optics backbone network spanning 110,000km covering the peninsula and Sabah. In TM’s annual report, Fibrecomm is listed as a subsidiary under its wholesae business, along with Fiberail Sdn. Bhd. where it owns 54%.

Fibrecomm was formed for the development of fibre optic telecommunications network utilising TNB’s electrical transmission line and distribution infrastructure, according to its website.

However, according to executives within the industry, there has always existed the possibility of TNB selling its stake. The only possible sticking point is that TM still remains in Fibrecomm driver’s seat.

As such, some would question why Puncak Semangat would be looking at acquiring a company where it couldn’t have complete control. In addition, allowing another player to take a stake would put the former in direct competition with TM’s own wholesale UniFi business.

However, given that the government has ben encouraging collaborations between the players in the telecommunications industry, it could be argued that Puncak Semangat’s ultimate aim may be a partnership.

TM has already signed wholesale agreements with Maxis Berhad, Celcom Axiata Berhad and Packet One Networks (M) Sdn. Bhd. to allow the companies to ride on its high-speed backbone.

As to the value of the Fibrecomm stake, an industry analyst said putting a price tag on the 49% block would not be a straightforward task. “Aside from taking into account the value of the actual infrastructure that Fibrecomm owns, the growth potential of the business must also be factored in,” said the analyst.

According to TM’s latest annual report, for FY11 ended Dec 31, TM Wholesale, where Fibrecomm and Fiberail are parked, reported a coordinated total revenue of RM1.07 billion.

Data from the Companies Commission of Malaysia show that FY11, Fibercomm posted a revenue of RM131 million, while its profit after tax was RM28.7 million.

13 July, 2012

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