Pervasive Computing - Broadband TV

Based on an article in Star Bizweek..14 may 2005

Opcom recently did a publicity having a news coverage about its past, present and future.

Many like to argue that Opcom is not a real deal because of its high dependency on TM as its main customer for its fibre optic products.

The Author went one step bolder to suggest that its stock price of is undervalued despite its current strong financial background of having RM55 million cash and zero debt, as well as it is on path of the digital future, as the “wheat” or the fundamental to the digital age. Wheat is one of the first grains to be domesticated by human being.
The author claimed that Redtone International Berhad and AKN Messaging Technology Berhad, both current evaluation are higher than that of Opcom have rather shady edge since Opcom is supposed to be the fundamentalist when the two former where just doing the application side. The author didn't dismiss the fact that stock prices are influenced by market sentiment (means human evaluation to buy based on rumors), is however urging stock trader to “open-up” by exploring the real hero. (Since we would have heard of Redtone more than Opcom due to the former VOIP trading nature) He or she does gives a technical ground that Opcom is undervalued because of the following:
1. Zero borrowing
2.RM55 Million in cash
3.Recent one-for-two bonus issue; shored up paid up capital of RM25.8million(net cash of 43.6 cents per share)
4.Dividend policy of 30% payout 5.7.6% yield in gross dividend.
6.Forecast compounded average growth rate(CAGR) from 2001 to 2006 of 27% and 54% respectively.

According to the M.D, they are seeking opportunity abroad as well as working towards offering broadband services.

One of their main concentration is towards FTTH (Fibre To The Home) which essentially using fibre optic to solve the last mile problem; using fibre optic cable to get future houses to be connected to broadband service exchange. While such is seen as unnecessary cost, Opcom defended that this is essential as future-proof technology.

One of the biggest winner is that its declaration of having RM55 million cash. Immediately with such statement, many would be lured into imagination of having JV with Opcom which is essentially the intention of Opcom, looking for partner to share its risk in dealing with future initiatives.

One interesting fact to note is that current broadband penetration is only 1% (according to MCMC), and under National Broadband Plan(NBP), 5% of penetration must be achievable by 2005 while 20% by 2008. 5% of 24 million, that is 1.2 million. If each penetration yields 1 ringgit, that would be RM 1.2 million per month.

Many are venturing into the broadband cake, where fixed line service facing stiff competition from wireless ventures such as those provided by the three main Telcos in Malaysis. TM and Maxis has committed a combined capital of RM 350 million in 3G roll-out and by considering the concept of supply and demand, the I.T people like me are looking at a projected demand of similar capacity available to us in the near future. This is based on simple rules whereby if a developer invested an amount of money into a property, at least similar amount of it would be expected from sales activities.

They predicted that the ultimate application would be digital home and entertaining services broadband TV where the much anticipated MiTV of Berjaya group is still under renovation due to technical reason. TM also recently announced interest in broadband TV, however they give no deadline about such commitment.

Broadband TV, as we had discussed earlier, is seen as attractive because it is part of the computing industry rather than broadcasting industry for costing consideration. Whereby a computing business model is always seems associated with lower operating costs and high return due to its ability to be duplicated in swift. One could understand it from a software point of view where development is tough but upon graduation all else seems irrelevant. Many software house still fail because they couldn't live through the tough-driven development periods. For our discussion here, a Internet-computing business model for the entertainment industry would always be favorable compared to conventional system.

We are in fact, waiting for pervasive computing to come into effect. Even Mimos is focusing on such area (I am sure because they are hiring people(e-learning, Linux & Ipv6 on such area in today's newsapaper) where we are awaiting a trend towards increasing ubiquitous, connected computing devices in the environment via wireless or Internet.

With no realistic deadlines and etc, this provides entrepreneur wannabe like me the privilege of preparation time for venturing into such business segment. A lot of contents provider are expected, and traveling-with-ICT idea could turn out to be a hit as a killer program in time to come for broadband TV.


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