This article first appeared in The Edge Financial Daily, on June 1, 2016.
KUALA LUMPUR: OCK Group Bhd intends to continue expanding its regional footprint as Asean telecommunications service providers continue to invest in better infrastructure and service solutions to meet the rapidly growing consumer demand.
Managing director Sam Ooi said the group intends to grow its existing operations in Indonesia, Cambodia, Myanmar and China, while also eyeing new markets in the region, including Vietnam, Thailand and the Philippines.
“A huge chunk of our investments this year will be for the 920 towers we will be building in Myanmar, for which we have allocated about US$70 million (RM289 million),” said Ooi at a press conference following the group’s annual general meeting.
To recap, the construction of the towers was part of the plan to build 3,000 telecommunication towers in Myanmar over a period of five years.
“We have two plans for regional expansion at the moment. One is to enlarge the number of sites that we maintain. In Malaysia and Indonesia, we now maintain more than 25,000 sites. Besides that, the real capex (capital expenditure) intensive expansion is for the new towers, such as the Myanmar project.
“For Myanmar, we have started works, with a few sites completed, while a few hundred sites are in progress. We are optimistic that we will complete the 920 towers by the end of this year,” said Ooi.
Besides Myanmar, he said the group is also looking to enter Vietnamese, Thai and Philippine markets.
“Thailand and Vietnam are going into 4G right now, and Myanmar just started with 3G, and they will probably go on to 4G in the future. With this kind of scenario, there will continue to be lots of activities in this region, which provide us room for growth,” he said.
Meanwhile, OCK will also expand its presence in Indonesia after the group almost doubled the number of managed sites to 20,000 from 11,000 in the previous year.
“In Indonesia, we are managing more than 20,000 base transceiver stations. The country has between 80,000 and 90,000 stations, so there’s still room for improvement in terms of our market share,” he said.
OCK chief executive officer Yap Wai Khee noted that revenue contributions from the group’s regional operations are growing, accounting for 17% of its topline for the financial year ended Dec 31, 2015 (FY15), compared with about 6.5% in the previous year.
“This year, we will still see growth in regional contributions, as we expect it to account for 20% of revenue this year. But we will only see more substantial growth in 2017 after we complete the 920 towers in Myanmar,” he said.
For FY15, OCK reported a 58% jump in net profit to RM24.75 million from RM15.59 million in the previous year, as revenue soared 70% to RM315.90 million from RM185.89 million.
For the first quarter ended March 31, 2016, net profit rose 21% to RM3.71 million from RM3.06 million a year ago, while revenue climbed 40% to RM78.44 million from RM56.16 million.
Going forward, Ooi said growth for FY16 will continue to be driven by the deployment of more sites by mobile operators, especially the new players, which are vying for market share.
“The new mobile operators, namely P1 and uMobile, will be deploying more sites to increase their market share, and we are the main contractor for these two operators. They need a lot of upgrading works for their existing and new sites to widen their coverage,” he said.