QucomHAPS Malaysia : Communication Infrastructure Service Provider

QucomHAPS Malaysia is a company providing communication infrastructure services. Its parent company QucomHAPS is a system integrator for the telecommunication industry.


QucomHAPS Holding Limited is a stratospheric communication infrastructure company based in Dublin, Ireland. QucomHAPS delivers stratospheric communication infrastructure service - High Altitude Platforms (HAPS) using piloted M55 high altitude aircrafts carrying communication equipment that is connected to existing and standardized local and international ground gateway equipment. QucomHAPS offers the only commercial HAPS service available in the world today. It is Irish based and has been in the business of system integrator for the telco industry for more than 10 years above.

What QucomHAPS Malaysia is offering to Malaysia is simply an infrastructure via High Altitude Platforms (HAPS) using piloted M55 Russian stratospheric aircrafts to the telecommunication industry.

The business potential for QucomHAPS Malaysia is huge, considering the fact that the infrastructure to be setup will be "leased out" to existing telecommunication companies such as Maxis, DiGi, Celcom, WiMAX providers, MVNOs and etc.

WiMAX has already been in the limelight of Malaysian press since early of 2007, with latest conclusion that they are going to launch something pretty soon, check out here and here.

QucompHAPS will not sell services to end-users directly. The customers of QucompHAPS are telecommunications providers as well as other related parties. And the good thing is that the infrastructure of QucompHAPS is flexible for implementation of many kinds of technologies such as GSM, 3G, Broadband and etc. Therefore, by leveraging on QucompHAPS, customers would gain direct cost saving benefits.

Thus, the business model of QucompHAPS is sound and practical. It is a service provider whose profitability depends on how well limited resources are managed for the benefits of as many customers as possible. This is very viable because it is about limited resources versus multiple clients.

As at to date, QucompHAPS Malaysia is looking forward to serving 3 customers and their capacity can sustain up to 10 customers.

The first commercial deployment of QucompHAPS service will be available only in Q1 2009, while in 2008, major activities will consist of preparation, testing and setup of infrastructures. About 400 engineering jobs will be created while the company will generate minor incomes.

To comprehend this properly, QucompHAPS leverage on the satellite provider's business model where heavy investments are inevitable during the early period. QucompHAPS Malaysia expected to break even between year 2 and year 3 and their operation cost is 25% of total cost of the project.

Even though QucompHAPS Malaysia is working with various parties such as Mindef, MCMC and etc, it is not a requirement to have a valid license from MCMC. For instance, if it were to service a MVNO (Mobile Virtual Network Operator) company, it is the requirement for the MVNO company to acquire relevant licenses from MCMC. Refer to this example; Tune Talk.

One of the tricks QucompHAPS would employ is to purchase petrol for the jet at bulk in order to gain benefits from uncertainty of crude oil prices; hedging technique.

The operating jets would also contribute negligible effects towards the environment.

For previous happenings in QucomHAPS, click here.

QucomHAPS just announced USD 355 million financing boost via three major financing deals. Check out the press release for more details.



(from left) Dr. Moe Thuzar, COO of Qucomhaps; Mr. Billy Harkin, CEO of Qucomhaps, En. Jamal Johar, VP of Marketing, of QHM; and Mr. Jonathan Cleary, VP of Finance, of QHM.

During the press conference, CEO Mr. Bill Harkin disclosed that QucompHAPS Malaysia worth approximately USD 200 million whereby USD 65 million is equivalent to 32% of the stake. Thus, from the three major financing deals, it is quite obvious to suggest that the whole investment makes use of an Islamic Bond Issuance to the amount of USD 260 million from a middle-east fund as hedging fund. I am no expert to this financial thing, but I think this is a smart financial strategy.

Press Release:

KUALA LUMPUR, 17 December 2007 – QucomHaps Malaysia Sdn. Bhd. (“QHM”) today announces three major financing deals amounting to some USD355 million, that will be channeled towards the company’s goal to provide ubiquituous broadband connectivity via High Altitude Platforms (HAPS) using piloted M55 Russian stratospheric aircrafts.

The three major financing deals, arranged in partnership with its Irish-based parent company QucomHaps Holding Limited (“QucomHaps”), are being structured as:

1. A direct equity investment by a Middle East fund amounting to USD65 million, for approximately one-third shareholding stake of QHM – to be concluded by Q1 2008.
   
2. A direct equity investment by a local state-owned fund amounting to USD30 million – to be concluded by Q1 2008;
   
3. An Islamic Bond Issuance to the amount of USD260 million from a Middle-East fund, entered into at the end of November 2007.

Billy Harkin, CEO of QucomHaps commented that the strong financing appetite received affirms the confidence of significant parties in QucomHaps’ strategic roadmap to realise the world’s first commercial deployment of stratospheric communications technology for instantaneous, nation-wide broadband and broadcast connectivity.

Mr. Harkin explains that for some of these investors, the funding interests in QucomHaps extend beyond solely ROI reasoning, “For example, a financial interest from the local state-owned fund is a strategic fit for both parties, to achieve a long-term objective for regional development.”

“This public-private partnership will create new jobs and skills development in this region. QHM prefers to rely on competent local human resource for sustainability of its service operations. In the long-term, we are looking at knowledge-transfer for some elements of the maintanence of stratospheric aircrafts in Malaysia,” he says, adding that Malaysia is set to become QucomHaps’ hub within its future plans to extend its services to Indonesia and the neighbouring territories.

Contract for M55 Aircrafts

Earlier in November, QucomHaps announced a six-part umbrella contract agreement with the Federal State agency of Russia signed in mid-October 2007, for the supply of 48 M55 aircrafts in Phase 1 of its operations. The contract value is circa USD1billion.

Demonstration - March 2008

Mr. Harkin shared that one part of this umbrella contract is to bring in an M55 stratopheric aircraft to Malaysia for a technical demonstration at the Subang air-base in March 2008. European telecommunications equipment suppliers are also participating in this demonstration – which will be a world’s first for commercial purposes.

QucomHaps is investing RM12 million to carry out this demonstration that involves telecommucations industry players, government and standards/ policy makers, to showcase the first wireless broadband and broadcast insfrastructure demonstration.

“QHM will carry out a test in the service demonstration to illustrate the wide area coverage of broadcast and broadband connectivity (such as digital broadcast, WIMAX, GSM, 3G voice and data),” shares Mr. Harkin.

Note: *HAPS refers to the use of aircrafts operating at stratospheric levels (circa 20 kilometers from the ground) to provide instantaneous, nationwide broadband connectivity at cost levels significantly lower than anything commercially available today.

For HAPS to work, it requires a network of ground transmisson gateways for its backhaul infrastructure. For the entire Malaysia footprint, five (5) stratospheric aircrafts (two aircrafts for Peninsular, and three for Sabah and Sarawak) will be on relay flight at any one time, to allow 24x7 broadband coverage.

QHM will be the first to offer HAPS as the most viable and cost effective alternative solution to telecommunications services providers to provide instantaneous, nationwide broadband and cellular coverage by complementing their existing terrestrial and satellite infrastructures.

For more information:

Jade Lo
Sirius PR Sdn Bhd
(603) 7805 2700
jade.lo@siriuspr.com.my

Jamal Johar
QucomHaps Malaysia Sdn Bhd
(603) 2287 0050
jamaljohar.my@qucomhaps.com