mTouche says Thai project can hit RM2.6bil revenue

New high for Dagang NeXchange Bhd

KUALA LUMPUR: The contract to build, install and operate the SMART4 public phone and WiFi hub terminals for Thailand’s state-owned TOT Public Co Ltd is estimated to be worth RM175.5mil, said Mtouche Technology Bhd.

In reply to a Bursa Malaysia query, the mobile value-added service provider however insisted that its forecast of a possible 20 billion baht (RM2.6bil) revenue from the project - currently still at the memorandum of understanding (MoU) stage - as “reasonable and justifiable”.

Last week, mTouche signed an MoU with G.I.S. Park (Thailand) Co Ltd whereby mTouche (Thailand) Co Ltd was invited to be G.I.S.’s solution and technology partner to jointly undertake the SMART4 public phone and WiFi hub terminal project.

Bursa’s query followed a news report (not The Star) that quoted mTouche executive director Tang Boon Koon as saying the 10,000 terminals to be built within six years were expected to eventually generate over RM2.6bil in revenue.

The first phase of 2,500 terminals will be built within two years and the balance within the next four years on entering the contractual agreement subject to full due diligence.

mTouche said RM2.6bil revenue forecast was “reasonable and justifiable” as the contract for the operation of the SMART4 public phone and WiFi hub terminal operation was for eight years.

“The revenue projection for the physical advertising is derived from the actual revenue generated from the existing G.I.S. Park’s physical advertising on their current billboards, digital display and light-box,” it said.

“The projection on the monthly revenue per SMART4 public phone and WiFi hub terminal is estimated to be RM2,037 per terminal per month. The total revenue for 10,000 terminals over eight years is estimated to be RM1.95bil.”

In its announcement last week, mTouche said that under the proposed revenue sharing terms for the physical advertising through the LCD displays and advertising light-boxes, mTouche would get 30% while G.I.S. would get the rest.

On the proposed revenue sharing derived from the sales and advertising partnership and sponsorship of the digital advertising through mobile applications and WiFi access, mTouche would receive 70%.

mTouche said the estimated total revenue sharing for mTouche for both the physical advertising and digital advertising partnerships and sponsorships based on the above revenue sharing basis was RM1.04bil.

It is unclear how mTouche is expected to reach the RM2.6bil potential revenue or the latest estimate of RM1.95bil revenue over the eight-year operation period.