Redtone ... Feb 2009

It began with offering discount prepaid and postpaid cards but with the evolution of technology, it ventured into the data business. The data business makes up 10% of its revenue but this will grow over time to nearly 20%.

It offers corporate Internet line, lease lines, IP virtual private network and broadband services on a WiMAX platform in parts of Sabah and Sarawak.

REDtone would capitalise on its 1,500 subscriber base for voice to grow the data business. It also has other ventures via unit DETV which is conducting trials for IPTV (Internet protocol television) offerings and a stake in Hotgate, a broadband service provider which offers services to hotels and common areas in Asean. REDtone has 19% stake in Hotgate.

In Sabah and Sarawak, it is the only operator with the WiMAX licence to offer broadband services. The service is available in parts of Kota Kinabalu and will soon be available in Kuching. It would be expanded to other parts of east Malaysia.

Being a broadband player in east Malaysia, REDtone was ready to participate in future tenders the regulator would be putting up to roll out the services under the universal service provision budget.

Besides Malaysia, REDtone has a discounted call business in a partnership with a Chinese company in Shanghai. Shanghai is its base to expand into other parts of China to offer discounted call business.

While the China business looked promising, REDtone lost US$3mil of the US$6mil it invested in Pakistan in a discounted call business.

It will continue to look at ways to venture into the long distance and international gateway business in other markets.

REDtone will this year source new funding of RM10mil-RM20mil to finance its expansion. The company is debt-free.

While its data business is anticipated to grow, voice would remain its mainstay, making up nearly 80% of revenue this year (2009).

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