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Monday, September 2, 2013

Network services provider OCK in expansion mode


PUCHONG: After setting up a subsidiary in Myanmar in July, followed by the incorporation of a unit in Cambodia last month, OCK Group Bhd is looking at Thailand and Indonesia for more potential business opportunities.

Managing director Sam Ooi said the telco network services provider has been studying and researching about venturing into some of the South-East Asian markets since the end of last year.

“In this globalised era, there is no business border and we see opportunities in our neighbouring countries where there is a need for network improvement,” he told StarBiz in an interview.

In Myanmar, it is submitting bids for projects alongside vendors to Norway-based telecommunication giant Telenor Group and Qatar-based Qtel Group, which had received the telco licence from the Myanmar Government.

“The two telco operators will have a huge roll-out and they might plan for 4,000 to 5,000 sites within two years.

“As we have already set up a company there, we will bid for the jobs,” he said, adding that there could be a “substantial” source of income should it successfully secure some of the contracts.

About two weeks ago, it announced the establishment of its Cambodian unit, Phnom Penh Pte Ltd under its wholly-owned subsidiary OCK International Sdn Bhd, an investment holding company for its regional and international businesses and subsidiaries and the provision of telecommunication network services and trading of related products and materials.

Due to the consolidation in the telco industry in Cambodia, particularly when Axiata Group Bhd’s Hello merged with Smart, there will be some consolidating work required.

As OCK has worked with Axiata’s local arm, Celcom Axiata Bhd, it stands a chance of winning contracts in Cambodia, he added.

On top of that, it also sees some opportunities in building and maintaining towers in that country.

Recently, it studied the feasibility of setting up a subsidiary in Bangkok for a potential green technology business.

“It is not easy to set up a 100%-owned company in Thailand compared with Myanmar, so we are still studying the process,” he said.

At the same time, the long-term evolution (LTE) roll-out in Indonesia has also attracted Ooi’s attention as it meant a huge business opportunity for OCK.

“We have intentions of penetrating the market due to the attractive growth potential there,” he said.

Back at home, he said the telco sector was still growing steadily as the LTE roll-out in Malaysia was still at the initial stage.

“I believe LTE licence holders will continue to roll out 4G services more aggressively next year,” he said, adding that telco players would have to deploy twice the number of existing stations for full coverage nationwide.

This is due to the shorter distance of between towers are built to enable high frequency transmission.

He said the LTE activities in the domestic telco industry would keep it busy for another three to four years.

Some operators may also choose to lease towers from network facility providers (NFP) like OCK, which owns about 60 towers currently, to reduce their capital expenditure, he said.

It aimed to increase the number to 300 sites by end-2014.

The licence it obtained in July from the Malaysian Communication and Multimedia Commission allowed it to lay fibre and lease it to operators, which is an additional scope for the services it provides.

According to Ooi, it has also secured a 10 megawatt-solar farm contract at a site in Kuala Lumpur International Airport, Sepang.

In July, it acquired Milab Marketing Sdn Bhd, which had received a development order for a solar farm project in Kelantan that could generate power of one megawatt, he said.

Going forward, it aims to grow the solar farm business, he added.

Based on its expansion plan, he estimated recurring income from its network facility provision and solar concession business to contribute some 5% to 10% to its topline.

Commenting on how the weaker ringgit would impact its business, he said it would be felt within its trading division which could see its profit dip by 2% to 3%.

Nonetheless, the segment only contributed 8% to its income for its financial year ended December 31, 2012.

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