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Thursday, October 31, 2013

Instacom, OCK seen as favourites for new telco towers

Source: http://www.thestar.com.my/Business/Business-News/2013/10/30/Favourites-emerge-for-rollout-of-towers.aspx

PETALING JAYA: Two small-cap, ACE Market stocks have emerged as the favourites to ride on the RM1.5bil roll-out of 1,000 telecom transmission towers in rural and under-served areas throughout the country.
The shares and warrants of telco infrastructure contractors Instacom Group Bhdand OCK Group Bhd saw heavy trading after several surprise incentives were announced last Friday to boost Internet coverage under Budget 2014.
Instaco-WB, which was quoted for trading on Sept 9, gained one sen at the close yesterday to 16 sen on volume of 47.22 million units, after hitting an all-time high of 17 sen.
It was the second most active stock across the local bourse. Its underlying share finished half a sen higher to 31.5 sen with 22.38 million shares changing hands.
OCK also rose four sen to 81 sen on trade of 4.17 million shares. The counter was up 65% for the year and 125% since its debut on July 17, 2012.
Instacom CEO Anne Kung told StarBiz over the phone that the Sarawak-based company was keen to participate in round two of the Universal Service Provision (USP)-funded towers, the majority of which are likely to be constructed in Sabah and Sarawak, given the lack of telco infrastructure in both states.
The firm, Sabah and Sarawak’s largest contractor for towers, had built some 1,200 towers under phase 1 of the USP tower roll-out, Kung said.
The USP fund was set up in 2002 to promote equal access to ICT infrastructure throughout Malaysia, especially in remote locations that are not considered economically feasible to commercial telcos.
It is not known how the new towers would be allocated between the Peninsula, Sabah and Sarawak, but going by Budget 2014’s stated goal of ramping up mobile internet coverage in under-penetrated markets, the bulk of the investment will probably be channelled towards East Malaysia. 
“We will get more clarity after the Malaysian Communications and Multimedia Commission (MCMC) opens the project for tender,” Kung said, adding that implementation would only begin next year.
Based on the first round of tenders, MCMC will invite Network Facility Provider (NFP) licensees, which Instacom holds, to bid for tower construction jobs. 
Transfer of tower ownership to the NFP licensees will only be made after the infrastructure is commercially viable, according to Kung.
Instacom has an orderbook of RM300mil, contributed mostly by a RM205mil contract it won from 1M Utama Sdn Bhd earlier this year to supply, install, test and commission telco infrastructure and engineering works in Sarawak. The award was said to be linked to the Education Ministry’s 1Bestarinet project. 
Despite the jobs it already has in hand, Kung said Instacom would not be stretched too thin if it clinched work for new telco infrastructure as it had the capacity to build out several hundred transmission towers a year.
The engineering-and-construction firm also intends to take part in fibre-laying jobs for phase 2 of the high speed broadband (HSBB) expansion, for which the Government has committed RM1.8bil under Budget 2014.
OCK managing director Sam Ooi did not respond to calls from StarBiz at press time as he was travelling overseas.

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