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Friday, October 1, 2010

YTLe a possible gold rush as per GPacket last year

Remember last year when Green Packet was being "gold-rushed" into a super high of $1.70 from an average of 0.80? This could happen again this year to YTLe - curently trading at 0.85. Green Packet's Wimax deployment has been consistent, but due to the geographical nature of Malaysia, many challenges were tough to overcome. As compared to a Wimax enabled country such as South Korea (small, 70% of population concentrated in Seoul, HNWI, higher per capita GDP) or a small footprint with high income nations such as Singapore or Hong Kong - or even Taiwan.

YTLe is the top challenger to Green Packet. And perhaps this might be a good gold rush for this stock.

While from old experience and history, it is a very tough market - with TM being government back hitting hard right after Green Packet was starting to roll-out - such as one-sided support for high-speed national broadband - virtually pushing another free monopoly while "back stabbing" Wimax players who have been hoping more government support.

Remember the situation witth the nationwide fibre optics cable company 10 years ago? 
Unfortunately, Malaysia has a knack for bungling infrastructure. Just look at the basic transportation infrastructure. It is parallel to internet traffic. Tons of cars being pushed into roads. Congestion and bottleneck! Correct. The last-mile connectivity is never given a thought. 

Another (un)great example: KL Sentral - the supposedly mega transport hub of the nation. Look, downstairs. There is just one single stairways to the buses. Again a super-mega bottleneck. 50 000 people going up and down that one single stairway sweating literally like dried sardines? What if there was a fire upstairs? A stampede? The simple reason the plan was approved is the politician or executive who approved it will never ever have to ride the bus downstairs. 

Therefore, back to Wimax in Malaysia. It is a great technology which perhaps if harnessed well, could propel the whole nation forward. Just like in Korea. Or if history will repeat, it will be another bottleneck. The greatest fibre optics on the nation, didn't take off. Because of bottlenecks and last-mile-hurdle and obviously cost of access. 

In my analysis: Perhaps the situation will consolidate (not so soon perhaps 3-5 years?) from several players to 2 players. Banks - yes that happened. Telco - yes that too. And if a consolidated few could give greater economies of scale, then this should have already been thought about since day one. But alas, inefficiency is a habit that has crippled the nation.

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