Is TM a wireless giant in the making?

From Star Online: Business
22nd March 2014

The ongoing speculation that Telekom Malaysia Bhd (TM) will be involved in a merger and acquisition (M&A) deal with Packet One Networks (M) Sdn Bhd (P1) gives rise to an interesting proposition - could a new wireless giant be created?

While details on the actual deal structure are scant for now, insiders point to one end result if it goes through: TM and P1 will collaborate to target the wireless broadband market and that TM, which has the much larger balance sheet, will eventually assume control over the new entity.

Spectrum wise, there is a fit between what the two companies would bring to the joint venture.

Spectrum basically refers to a range of radio frequencies. The bandwidth of a radio signal is the difference between the upper and lower frequencies of the signal. A spectrum belongs to a specific operator. Only that particular telco can operate in that space. Also to be noted is that lower frequency bands have a wider range of coverage but have smaller capacity in terms of the amount of data or voice signals that can be carried. On the flip side, higher frequency bands have capacities to carry 4G type services but have a lower range of coverage.

PI currently owns valuable swathes of spectrum in the 2.3GHz and 2.6GHz bands whereas TM has some spectrum in the much lower bands, namely 450MHz and 850MHz. (See table). Notes an analyst: “A collaboration could create a very powerful player given the combined low and high-frequency bands they have that can provide for superior coverage and capacity. Of course it is left to be seen if they can successfully derive the synergies”.

Another analyst says: “We view the move as positive to TM since this gives it the opportunity to complement its fixed broadband services with a wireless platform.”

Ten Pitfalls of Strategic Failure

From The Edge Malaysia
18th March 2014

IN the 20 or so years that I have worked as a consultant I have seen employers craft robust strategies only to see them fail because they did not anticipate the most obvious pitfalls. In my book Making Your Strategy Work: How to Go From Paper to People I have tried to explain what these are and how to avoid them. Here is my top ten derived from over 100 interviews with CEOs globally.

Emotional business

The first stumbling block is about the team around you. Having a strategy is useless if your team does not understand it, agree with it or is incapable of implementing it. The rubber always hits the road when we talk about people. Having the right people in the right place is therefore critical. A mediocre team can run the best strategy aground or deliver sub-optimal results at best. Companies should first hire the best people possible and then motivate them to implement the strategy.

The somewhat related second strategic failure is overconfidence. While you need to be confident about your strategy a little bit of paranoia is healthy. Companies can overestimate the value of their business model, customer base and ways of doing things. Video rental chain Blockbuster is an example of a business that failed to move with the times and saw its business model collapse. The message here is simple - be ruthlessly honest and receptive to new ideas / models or you may wake up one day and find your business gone.

Pay attention to the environment

Third: failure to move with speed and pace. Companies often lull themselves into a false sense of security and can be slow to react. There is little upside in procrastinating once you recognise the reality of a situation. And when the news is bad, acting sooner is better than later. Bad news seldom improves with age.

Fourth: succumbing to the short-term. Companies are under pressure to show returns and impress shareholders. Marks & Spencer (M&S) fell prey to this in the late 1990s when it announced its target of becoming the first U.K. retailer to generate annual profits of £1bn. The announcement had the desired effect on the share price but eroded the company’s long-term hold on the market. Rivals snatched market share and by 1999 a profit warning was on the wall. It was not until 2008 that M&S was once again able to deliver a profit of £1bn. It is essential, therefore, to stay on track and prioritise long-term investment over short-term gains.

OCK sees surge in telco jobs, aiming for RM20mil Cambodian job

From Star Online: Business
17th March 2014

PETALING JAYA: OCK Group Bhd expects to double its order book size in the telecommunication segment from the current RM70mil, as the company targets to win more contracts from local telecommunication companies (telcos) and expand its business overseas.

Managing director Sam Ooi Chin Khoon said the company was eyeing a RM20mil contract in Cambodia.

Record contract wins at OCK last year was driven by local telcos’ rapid deployment of 4G long term evolution services, prompting the company to increase its hirings.

“We receive 30% more mechanical and engineering job requests this year,’’ Ooi told StarBiz in a recent interview.

“The jobs we have in hand will last us for two years and we will have to expand our headcounts due to higher demand for jobs,” he added.

7 signs we’re near a market top, and what to do now

From Marketwatch.com
7th March 2014

"Sitting on the sidelines and waiting for the bull market to top out takes tremendous discipline. Trying to capture that final 5% can be costly if you get the timing wrong (and most people do). Be prepared for increased volatility as we get closer to the end.

Of course, it’s not easy to sit on the sidelines when everyone else seems to be making money. Although many investors are dreaming of another 30% return this year, the odds are good that it will be a difficult year. Yes, during a mania stage anything is possible, but with each passing week, the clock is ticking."

Remember March 4, 2014 — a day that will go down in Wall Street history as the beginning of the end for this latest bull market, which is about to celebrate its fifth birthday.

On March 4, the Dow Jones Industrial Average rose 227 points based on a report that Russian troops were pulling back from Ukraine’s border. This “news” lit the market on fire, a sign that the market is heading into a mania stage where it doesn't take much to boost stocks.

Indeed, nowadays instead of the “Nifty Fifty” stocks that defined the late 1960s market, we have the likes of Facebook, Tesla Motors, and Chipotle Mexican Grill  — the new new things.

Can the market go higher? Sure, although the higher it goes, the more dangerous it becomes. Often, during the latter stages of a bull market, the market separates itself from reality and appears to be on another planet.

Such red flags are everywhere:

1. Retail investors have been pouring money into stock mutual funds. The fear of missing out on the sixth year of a bull market has created something close to a buying panic. Although not as maniacal as we saw in 1999, the stock cheerleaders are back and rooting for their stocks and mutual funds to go higher — just like they always do before a crash or bear market.

2. The Investor’s Intelligence survey is concerning. The closely watched II survey shows a low proportion of bears (less than 20%), which some have pointed out is the lowest proportion since just before the 1987 crash.