market update
Opcom Holdings Berhad
1) Opcom Holdings Bhd is a Malaysian based investment holding company engaged in the manufacturing of fibre optic cables and cable-related products
2) The business activity of the group is functioned through the following segments:-
a) Manufacturing
b) Trading and Engineering Services
c) Other Operations
3) All the operations are functioned through Malaysia and it derives the majority of revenue from Manufacturing segment which includes fibre optic cables, systems, accessories and thixotropic gel
4) The company also provides management related services
5) In addition, the company is also involved in trading of cable filing, flooding compounds and industrial products, and provision of engineering services
6) Opcom is the major listed optic fiber manufacturer in Malaysia
7) In 2009, Opcom received a huge Rm 359 mio job award fr Telekom Malaysia (TM) for the purchase of fiber optics
8) In 2011, Opcom announced a Special Dividend of 22.5 sen
9) In 2012, a Special Dividend of 11 sen plus a Normal Dividend of 1.5 sen, making it 12.5 sen for that year of 2012
10) So, in just 2 years, total 34 sen Dividend was paid
11) While telecommunication companies (telcos) say they have consistently expanded their infrastructure for an improved 4G experience, Malaysians have continued to complain about poor connectivity and speed, even in major cities
12) This, in turn, has not effectively narrowed the digital divide in Malaysia, particularly between the urban and rural areas
13) As the world ushers in the new era of Internet through the adoption of 5G, the government realises the pressing need to step up the efforts to improve domestic Internet accessibility
14) Hence, a new model - which could potentially be the first in the world - has been adopted to roll out 5G
15) The government, via a wholly-owned special purpose vehicle (SPV), will build, own and implement the 5G infrastructure and spectrum
16) Telcos, on the other hand, would have access to the infrastructure and spectrum through a wholesale pricing mechanism
17) This would essentially make the 5G spectrum a "shared commodity", instead of individually owned as in the previous generations of mobile networks
18) The 5G SPV, or Digital Nasional Bhd to be exact, will invest about Rm 15 B over a period of 10 yrs to roll out 5G, beginning from end 2021
19) CEO Ralph Marshall said the shared 5G network presents a unique opportunity that benefits the telco ecosystem and the end-users
20) The shared infrastructure model will enable Malaysia's leading operators to catch up with global leaders across multiple customer experience metrics
21) Benefits to Telcos are:-
a) Shared infrastructure reduces capital expenditure and operating expenditure for telcos - who will only incur about 1/3 of the cost
b) Generate new revenue streams by offering 5G services
c) Enables operators to focus on 4G coverage, migrate 3G subscribers to 4G and improve customer experience
22) Benefits to Users are:-
a) Early access to 5G
b) Empowering and integrating the rakyat into the digital economy
c) Translating into lower 5G costs
d) Bridging the urban-rural digital divide
23) Marshall argued that there is an urgency to accelerate the 5G deployment in order to increase Malaysia's competitiveness
24) Countries across the world have been working towards creating a 5G-enabled environment, which is a key factor in growing local businesses and attracting foreign investors
25) The adoption of 5G will also mark the beginning of a more advanced and extensive digital economy in Malaysia
26) The government's obligation is to make sure they create sufficient opportunities for wealth creation and income generation such that people can pay for these 5G services
27) A good nationwide 5G accessibility at affordable prices would create employment opportunities, especially high skilled jobs that would drive businesses and revenue generation
28) The estimated Rm 15 B price tag for the 5G rollout is inclusive of the operations and maintenance costs as well as capital expenditure or cost of equipment over a 10 year period
29) On average, the O&M costs to roughly be about Rm 600 mio to Rm 800 mio a year depending on how intensive the rollout would be in a particular year
30) It will be privately funded through a Private-Public Partnership arrangement
31) Digital Nasional will likely front load the investments, possibly investing 25% of the Rm 15 B in the first 2 years
32) Following that, about 15% to 20% will be spent in the next few years and the percentage will gradually drop in the following years
33) The focus is to achieve a fast rollout and making sure it don't compromise on 5G connectivity nationwide
34) Digital Nasional will be run by professionals, efficiently and transparently
35) The MyDigital blueprint, which was unveiled on 19 February 2021, not only focuses on rolling out 5G internet connectivity but also aims to enhance the usage of cloud services across the government, ensure full adoption of digital signature by the public sector and undertake the full implementation of the National Digital identity
36) The fast 5G rollout will greatly benefit Opcom Holdings Bhd as it is the major listed optic fiber manufacturer in Malaysia Market
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