that's the thing that i read in the edge - he reinvest everything as a 'share' holders. that doesn't mean he can't cash it out later when the shares goes up and he may get higher value of his Megawisra through this deal. so it's kind of a way for him to get better value from his Megawisra by injecting it to Tdc.

but as you said the best we can expect is a win-win situation. we'll never really know what he have in mind so hope for the best for Tdc.

TIME dotCom Bhd (TdC) (5031), which launched the country's first 100 per cent fibre optic fixed line Internet network in February, has to date roped in 30,000 home and office users in the Golden Triangle and Mont Kiara area.

As a comparison, Telekom Malaysia Bhd's ™ RM11.3 billion national high speed broadband service branded UniFi since its launch in March has a take-up rate of 4,800 customers as at June this year.

TM hopes to attract up to 50,000 UniFi customers by year-end as the economy picks up.

The difference between the two, however, is that TdC's fixed line is 100 per cent fibre optics while TM use a combination of hybrid cables and wires.
TdC chief executive Afzal Abdul Rahim said the 30,000 users currently occupied over 230 buildings spread across 3.5 sq km.

The service does not serve landed properties.

TdC expects to see incremental rise in revenue from these business segments.

"The network expansion and introduction of new products is set to make a postive impact to our revenue and market share growth," Afzal said.

Packages for consumers start from RM99 a month while businesses can enjoy the service from RM148. Installation takes up to seven days.

Under TdC's fibre broadband, customers can now download a two-hour movie in seven minutes compared to five hours on standard broadband, download 10 songs in 10 seconds compared with eight minutes and send an e-mail with a 20 megabit attachment in four seconds compared with four minutes on standard broadband.

Read more: TdC has 30,000 users of fibre optic Internet service http://www.btimes.com.my/Current_News/BTIM.../#ixzz17UQ1lxIO

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Added on December 8, 2010, 2:56 pmInjecting life into Time dotCom
By RISEN JAYASEELAN
risen@thestar.com.my


IN October 2008, then 30-year-old Afzal Abdul Rahim (pic) emerged as a new shareholder and chief executive of the ailing Time dotCom Bhd (TdC). Afzal's entry into TdC was via his vehicle called Global Transit International Sdn Bhd (GTI) and the deal was structured this way: Khazanah Nasional Bhd would transfer 30% of its holdings in TdC into a special purpose vehicle (SPV) called Pulau Kapas Ventures Sdn Bhd (PKV) resulting in Khazanah getting 61.2% of PKV. GTI, in turn, injected its wholly-owned subsidiary Global Transit Communications Sdn Bhd (GTC) into the SPV, with GTI then being given the balance 38.8% of the PKV.

Now two years later, after having met milestones at TdC the company has shown five consecutive quarters of earnings and revenue growth he is set to gain control over TdC by injecting his prized assets into the company. Confident and chatty, Afzal, a mechanical engineering graduate from the University of Sussex, breezes through questions effortlessly, especially the tough ones about whether he is cashing out or injecting his assets at too high a price.

Excerpts:

Q: What is your reaction to the sell down of TdC shares a day after the deal was announced?


A: The sell-down is knee-jerk reaction by investors and is expected, given that it involves a capital reduction and consolidation of shares. However, to give perspective, many of the analysts and fund managers we have spoken to in the last three to four months, have suggested that we clean up the balance sheet and rationalise our shares in circulation, considering TdC seems to be sustainably profitable now. There is also the intent on our side to institutionalise our shareholding. In July this year, when we first started actively engaging investment analysts and fund managers, we only had less than 1% of institutional shareholders. Today, institutional shareholders make up about 10% of our shareholder base.

One view is that the capital reduction was ill-timed, in the sense that it should not have been coupled with a deal that was primarily aimed at enhancing shareholder value. What are your comments?

The capital reduction and consolidation is necessary to enhance shareholders value moving forward. For TdC to leapfrog in its end to end service and business offerings, it needs to acquire these assets. Furthermore, we wanted to acquire using TdC shares as currency in order to commit the vendors of the assets to TdC. TdC can't issue shares as its share price is below the par value of RM1. So there is really no way out but to do capital reduction and consolidation of shares for the eventual benefit of TdC.

Why such a small capital repayment? Why not sell more DiGi.Com Bhd shares and give a higher capital repayment?

We believe in this business and that we can generate earnings moving forward. But we have then to decide if we are a profit and dividend yielding company or a growth company. We've managed to turn the company around and profitability is growing. The dividends from DiGi.Com shares are now a core part of our earnings. If we sell DiGi.Com shares and return that money to shareholders, then we are denying our shareholders future earnings. Selling the DiGi.Com shares also indicates that we lack long-term confidence in our business.

So what are the long-term plans with the DiGi.Com shares?

We will do what's best for our shareholders. We're very happy with DiGi.Com's performance as a company. If we did decide to sell the DiGi.Com shares, we would have to think whether to return the money to shareholders or to invest it in our business. But right now we have a lot of confidence in our business. DiGi gives us a certain return from the dividends. If we were to invest it, we must ensure that we can get at least the same amount, if not more than those returns.

One contention of this deal is that some of the assets that you are injecting into TdC are being valued at very high prices. For example RM105mil for GTL, which is a loss-making company.

The valuations were jointly decided by TdC's advisors together with an independent financial advisor, Public Investment Bank, which was appointed by the two independent directors of TdC Ronnie Kok Lai Huat and Balasingham Namasiwayam. In addition, TdC's chairman Abdul Kadir Kassim is a firm believer in governance and due process. What this valuation shows is that there is upside if the acquisitions go through.

As an example, GTL owns 10% of the Unity cable system that was built at a cost of US$300mil and whose replacement cost is many times that. Furthermore, the biggest barrier to entry for submarine cables isn't just cost but to actually be invited to participate in the cable. Then there is the matter of putting a value on the capacity of the cable based on market prices for bandwidth. The Unity submarine cable was just completed in April 2010 and the company was only operational in April. The past two years' results reflect the phase of cable construction. The book value reflects only the historical construction cost of the asset while the value of the asset today lies in its market price of the cable bandwidth capacity and earnings potential. At a capacity of 480 Gbps being GTL's portion of the Unity cable, monthly wholesale lease prices currently at US$59,000 per 10 Gbps and an asset life of more than 10 years, GTL is a strategic asset that will provide the TdC with cost advantages and access to the regional wholesale market.

But is there going to be an over-capacity of submarine cables?

Not across the Trans-Pacific, I don't think so.

Can you and TdC actually monetise the submarine cable?

Unity was commissioned only in May and GTC has already sold 10% capacity of the initial 48Gbps.

Can you give us some colour on PKV and how you are increasing your stake there from 38.8% to 51%?

I have been working 18-hour days since 2000 to build these companies which are like my children. If I am going to inject these companies into TdC, I will want to have some control over them. I also have to put my money where my mouth is, and inject all my businesses into TdC at a valuation that is ascribed by the independent financial advisors. I am also activating a call option to pay Khazanah for more TdC shares. These companies are earning year-to-date around RM13mil. I am giving that away.

But these companies don't seem to have a long enough profit track record?

AIMs has been around since 1990. It has been profitable since 2000. The losses that you see were because we had gone into the Singapore market to build a data centre and had to pull out during the bad economic times in 2007, so there was an investment loss. Profits from operations have always been positive in AIMs.

What about this earn out structure that Khazanah has with you? When will your shareholding in PKV increase in accordance with this agreement?

The agreement between Khazanah and us is so onerous that we will only get our earn-out at the end of the three-year period, meaning end of next year. So even though we have exceeded our targets, the earn-out structure (whereby we will get more PKV shares due to our performance) will only kick in end-2011. We are now paying for more PKV shares via a call option.

So why didn't you wait until 2011 to get control over PKV and thereby the 30.04% block of TdC?

By then, it may be more expensive for TdC to buy these companies. For example, GTC's growth rates are stunning. These companies are growing at a higher rate than TdC. The longer we wait to do the deal, the more expensive it is going to get for TdC to buy these companies. There are also certain operational and business synergies that need to kick in now, for the whole group of companies to be competitive.

How would you describe the new TdC, post acquisitions?

This will allow TdC to entrench itself as a leading regional wholesale player with a specific emphasis on high availability data services addressing a much wider part of the value chain than we have ever offered before.

What did you actually do to extract more value out of TdC's fibre-optic network since becoming the companies' CEO?

Fibre is our key asset and will always remain that. All we did was to understand market demands and requirements and match that to where our infrastructure was present. We also simplified our technology and engineering aspects of our network and significantly increased utilisation across our nationwide fibre presence. So long as there continues to be a strong relationship between customer demand and the manner of which we deploy our network, we will continue to extract value from our fibre asset base. A prime example of this is how we managed to use the same cause of fibre to serve our mobile backhaul customers, high capacity enterprise and corporate clients as well as our high bandwidth home customers.

Some say that selling bandwidth alone is not interesting from an earnings perspective.

Realistically, selling bandwidth should and must be the main focus of any data-centric fixed-line provider. There are many global examples of companies which continue to churn out sustainable growth profits by staying focused on the bandwidth business. While it may sound sexy to diversify to address various buzzword and disruptive industries, doing so merely distracts from our objective of continuing to take part in the massive growth opportunity that the Internet and content lifestyle have to offer.




This post has been edited by yok70: Dec 8 2010, 02:56 PM

Timecom needs an oomph factor to lead further upside play.

Without one, any upside will be limited by a flood of sellers for a quick buck.

The boss has been visiting fund managers. Now, if they buy it, it will fly. If they just see see look look first, then it will laggard for some time. Watch DRBHicom last few days, how fast it goes up. But then look back at it few weeks ago, people also have doubt even though everyone knew its profit soar and highly undervalue.

This post has been edited by yok70: Dec 8 2010, 05:16 PM

You need some analyst with a good following to provide the oomph.

Malaysia Finance blogspot has quite a lot of followers, though you suspect self interest do play a part. Nothing wrong, if you have enough influence. This is a free world.

Today they make small push again to high 0.70 ..I hope can hold laaa

This post has been edited by rosdi1: Dec 17 2010, 04:02 PM

hopefully the trend continue to increase, i entered at 0.715 (before the restructuring announcement), just a little bit to go

Good sign!
Lets go beyond 0.7x next week.

it shd go pass 0.70 next week ... or many be? emm, i got to be greedy a lil as i hold them since 0.62 - 0.645

Wah..good for you at already a safe price.......
I was high averaging at 0.72+ after following my plan I bought some more at 0.75 and couldn't sell without big losses when it gap down from 0.77 to 0.67 but luckily manage to average down again to 0.69- resulting in huge holding of 40% of my total investment

I just hope I could dispose some at 0.72 reducing the exposure to only 20% of the total.
and the rest I will set a target at around 0.77 or so.

Fully aware that HLG still maintain a buy for a target price of 0.89

0.60 is a support level as u can see huge buy volume during the gap down! was there any bad news?
other than tat, its on track to new high. buy high, sell higher? not much idea about bolehland shares, who knows? can gostan also



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I agree with you there is a rich supporter at around 0.60 or more precisely at 0.62
In our Bolehland anything also can!!!!

lets hope that it goes back to the good days of 2007 ... rm1.00 or above?

could be another KNM, after share merging though.

But still a long way to go , 6 months time ?

Lets hope there is improved earnings over the next few quarters or else its better to quit. Too much expectations and too little deliveries.

Well said, it is important to have a good risk management, no emotion about that, if wrong just move out and look for another candidates, there will always be another star!!


This post has been edited by Remng: Dec 18 2010, 04:57 PM

this stock really burned me bad. since bought it RM1.7 and sold it few months back at RM0.50, maybe shouldn't sell it so fast then

What happen to the stop loss
To me Max is 20%... now I am on 0.615
For a lees volatile stock my max will be less than 10%

err, i am a die hard 'fan' of this company. emotions aside, it shows good support in the short term at rm0.68 ... worth to take a closer look for the brave ones. mho only.

lol, back then im just a newbie, just simply buy so can't blame anyone but myself