Wednesday, March 14, 2012

1Bestarinet to kick off soon

In The Edge Financial Daily Today 2012

Written by Nadia S Hassan
Tuesday, 13 March 2012 11:44

KUALA LUMPUR: The government’s 1Bestarinet project is in the process of being implemented by YTL Communications Sdn Bhd (YTL Comms), a unit of YTL Power International Bhd.

Although no official announcement had been made by the government on the project award, sources said YTL Comms has already rolled out the service to a number of schools in the Klang Valley, having started
doing so from December last year.

When contacted, a YTL Comms spokesman said: “The project was awarded based on an open tender submission made to the Ministry of Education and, whilst we appreciate the opportunity to respond, we are bound by the tender guidelines on confidentiality.”

When asked about 1Bestarinet at a recent event, YTL Comms CEO Wing K Lee declined to comment on the matter, only saying that: “We are supportive of this project by the government, and believe that it is good for the people.”

It is learned that there are around 400 schools in Selangor that are due for implementation in the coming months. The focus of the reportedly RM1.5 billion project is to provide Internet access and a virtual learning platform to 9,924 schools across the country.

“There had been question marks over the status of the project. However, it appears that YTL Comms is picking up the pace to meet the government’s goal to complete 1Bestarinet and have it available to all the schools by 2012,” said an industry observer.

The project involves the provision of both Internet access and a virtual learning environment (VLE). The tenure of the contract could be up to 15 years and would include the management of the VLE. The schools would be provided equipment and 4G dongles, while Internet access would be required to carry out the VLE.

The government announced the tender last May as part of its efforts to wire up the country’s schools.

It had been reported that six companies — Celcom Axiata Bhd, Jaring Communications, Maxis Bhd, Multimedia Synergy Corp, the team of Telekom Malaysia Bhd and Time dotCom Bhd, and YTL Comms — had submitted bids.

Then last October, YTL Comms appeared as the winner of the project, according to a posting on the Ministry of Education’s website. However, the announcement was then taken down a few hours later, according to reports.

News that YTL Comms had been awarded the contract by the government had caused a ripple in the industry. Critics questioned the award of the project, citing vague tender guidelines and YTL Corp’s lack of a track record as a service provider relative to more established industry peers that also submitted bids.

Since then, there has still been no official word on who has gotten the project, although the work has been going on for the past three months.

Regardless, this project would give a boost to YTL Comms, which is aggressively rolling out its Yes 4G WiMAX service. The company launched the service in November 2010 with great fanfare, catching the attention of the industry when YTL announced its partnership with US-based Sezmi Corp. The partnership would allow YTL the rights to deploy a hybrid TV service not just in Malaysia but also in the Asia-Pacific. YTL Comms is also reportedly among winners for the 4G/LTE spectrum, which is due to be rolled out commercially post-2013.

YTL Comms, however, is currently loss-making, according to YTL Power’s latest 4Q results. For the financial period ended Dec 31, YTL Comms recorded a net loss of RM197 million while its top line stood at RM30.6 million. For the previous corresponding period, revenue had stood at RM4.7 million, while net losses had been RM27.7 million.

YTL Power stated in its notes to the announcement: “The continuous growth in its subscriber base has resulted in an increase in the revenue of this segment. However, the losses were mainly attributable to the start-up and fixed operating cost incurred.”

There had also been talk that in order to grow its business, YTL was possibly looking to partner with other telcos. This, however, is not a new occurrence as most of the telcos have been exploring potential partnerships among themselves in order to fully utilise their spectrum and sweat their assets.

YTL, however, has yet to announce any partnership with another telco, but the spokesman is quick to point out that the company has been in discussions with other players.

“YTL Comms is constantly in talks with other players in the industry on a wide range of topics. These topics revolve around the progression of the wireless communications industry in Malaysia and how we can work together to develop strategies that benefit the consumers and the industry as a whole. This is not to say that we have specifically discussed consolidation with any party,” said the company spokesman.

This article appeared in The Edge Financial Daily, March 13, 2012.

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