WHAT will be the biggest challenge faced by your company and the information and communications technology (ICT) industry this year?
The global financial crisis can potentially trigger a chain reaction of defaults with very specific threats to our business operations, revenue and profitability; such as the cancellation of contracts, renegotiation of contract values and terms, and debt defaults.
Therefore, it is wise to “segmentise” clients and customers to manage and mitigate business risks.
As for Green Packet, since our share price has declined, we would have to work harder to raise funds for future investments, specifically to enter new markets and to deploy Worldwide Interoperability for Microwave Access (WiMAX) network infrastructure to cover up to 60% of the Malaysian population by 2012.
With the intensity of our investment in WiMAX, both in developing products and solutions for the global market, and as an owner-operator in Malaysia, we are very fortunate to have gotten the bulk of our funding when times were good. We are prepared for the current harsh economic climate.
What is the outlook of the ICT sector?
We are cautiously optimistic about 2009. No doubt, we will all be faced with lower capital spending as operators and ISPs (Internet service providers) tighten their belts.
However, with across-the-board cost-saving measures by the industry, I believe efficiency will become an extremely important component in ensuring continuous development and this is where ICT plays a big role.
We hope that operators and ISPs globally will look to Asian IT companies such as ourselves for more economically-viable solutions and smarter partnerships.
The Government’s target to raise household broadband penetration to 50% by 2010, an estimated 16% increase per year from our current low penetration of 18%, will to some extent sustain the ICT industry.
We are certain that the US and Britain will be spending less, but we expect capital, talent and innovation to migrate to emerging markets – markets of opportunities which are hungry for fast, efficient and true broadband solutions. This is an opportunity for us, and those like us who are serving emerging markets.
Looking at the bigger picture, Malaysia has an opportunity to establish itself as a regional WiMAX hub, as the country is among the first to issue the 802.16e 2.3 GHz spectrum licence ahead of it neighbouring countries.
At the same time, P1, our WiMAX operator arm, claims to be the first to launch commercial services in the Asia-Pacific.
We are definitely among the top five in the world in terms of scale of network deployment. It certainly makes for a compelling case for the Government to further pursue and drive this initiative.
How is your company coping, given the expected slowdown in corporate and consumer spending?
Considering WiMAX is a new technology, the current market sentiment and our initial limited coverage, we are doing okay – our subscribers are pleased with our connectivity experience and service delivery, and the momentum is picking up as P1 WiMAX becomes available to more people.
Despite the economic environment, communications and connectivity will never become negligible. As the WiMAX technology enables increased productivity and at the same time, helps reduce cost, we should be more sought after.
In terms of Green Packet, we expect continued global interest in WiMAX technology and solutions as WiMAX offers an economically-viable alternative to the more traditional broadband infrastructure.
Green Packet’s product and solutions division, with its strength in research and development and network of global manufacturers and business partners, has a big role to play in the WiMAX area.
We support the acceleration of the WiMAX momentum and are developing devices and applications to further expand the WiMAX eco-system for not just Malaysia but also the global market.
What are the areas of opportunities and what will be done to take advantage of them?
The opportunities include:
·Increased demand for mobile broadband and networking products and solutions due to inconsistent fuel prices.
·We expect a less competitive environment in the broadband solution space as industry players become more risk averse. We believe companies that sustain a strong presence and continue to invest through these challenging times will be rewarded.
·Communication providers globally will be looking for more affordable, field-tested, scalable solutions, giving us increased opportunities.
·Companies and consumers looking to increase productivity and reduce cost will transit to WiMAX technology and services.
·WiMAX spectrum licences in the region are expected to become cheaper, which serves us well, as we are interested to acquire these licences and expand our regional WiMAX footprint as owner-operator.
In view of these turbulent times, how does the company intend to keep its market share and remain competitive?
We believe in our business plan and strategy and will continue to invest up to 2010 to fulfil our goals. We believe we will reap the rewards when the economy turns around.
However, we are adapting to the challenging times by optimising and improving business and operational processes, and spending wisely.