Green Packet aims to widen operating profit

Since relinquishing operations of Packet One Networks Sdn Bhd (P1), chief executive officer Kay Tan noted that the company was

PETALING JAYA: Mobile broadband and networking solutions provider Green Packet Bhd aims to increase its operating profit and turn around by its financial year ending Dec 31, 2015, riding on growth in its old core businesses.

Since relinquishing operations of Packet One Networks Sdn Bhd (P1), chief executive officer Kay Tan noted that the company was “going back to its roots” as a software solution company.

It will now focus on its two core businesses, namely software and device, as well as communications.

“We hope to widen the operating profit by this year,” he said.

He added that the company was already profitable, if the losses from now associate company P1 and interest on its exchangeable bonds were stripped out.

“The overhang is not encouraging but this business is already profitable. It’s just that the size is not enough to cover the interest and losses from P1,” said Tan.

He said that long-term evolution (LTE) was a key growth area for Green Packet, and hoped to double the size of the company’s LTE clients.

As of Dec 31, the company had 17 LTE clients with 47 on trial, which was an improvement from the previous quarter when it had 14 clients and 36 on trial.

“The key thing we want to grow is actually the LTE market. If you look at the past five years, it’s actually WiMAX. Of course WiMAX is a technology that is able to deliver the same service as LTE, it’s just that worldwide adoption has tapered down. So, in order for us to grow our revenue base we would want to be able to sell more through LTE versus WiMAX,” he said.

Green Packet provides software solutions for larger screen devices as opposed to smaller screen devices like mobile phones.

“GSA (Global mobile Suppliers Association) is projecting 350 LTE operators. That means that 350 telcos around the world have actually migrated or are transitioning to LTE. Out of the 350, only about 100 are on large screens. Compare this with the 17 that are our clients, there is still room and opportunity for growth,” he said.

To do this, he said the company would be launching more products in 2015 and 2016 in order to have a full suite of products that was diverse in the LTE field.

Telekom Malaysia Bhd (TM) bought a 57% stake in P1 for RM350mil in end-March 2014. As part of the deal, TM also agreed to subscribe to RM210mil of Green Packet’s issued redeemable exchangeable bonds.

TM will also invest RM1bil over the next four years to expand P1.