This article first appeared in The Edge Financial Daily on January 18, 2018
KUALA LUMPUR: Green Packet Bhd is expected to announce that it has bagged a deal worth RM300 million from television broadcasting company MYTV Broadcasting Sdn Bhd as early as today, people familiar with the matter said, who believe that the contract will help Green Packet become profitable again.
According to sources, the contract will entail Green Packet supplying set-top boxes to MYTV — the company selected back in 2014 to spearhead the national digital terrestrial television (DTT) roll-out.
It is understood that the contract was awarded directly to Green Packet, which has been contracted to develop the decoders and supply 4.2 million units to MYTV.
“The other contender for this contract did not meet the technical requirement. They encountered some technical issues with their own products during the tendering stage, especially in terms of producing viewership data,” one source told The Edge Financial Daily.
“It (Green Packet) is expected to make a public announcement soon, either tomorrow (today) or [on] Friday (tomorrow), on the matter,” another source said.
In October last year, MYTV’s chief executive officer was reported as saying that the new set-top boxes to be distributed in the DTT roll-out will have the ability to poll viewership data and provide for over-the-top (OTT) and other future interactive services. MYTV is wholly owned by Altel Holdings Sdn Bhd, which in turn is wholly owned by Altel Group Sdn Bhd. Altel Group is jointly owned by Datuk Hilmi Mohd Noor and Azman Hanafi Abdullah.
News reports surfaced as early as last year that Green Packet was close to bagging a contract to supply set-top boxes to MYTV. However, the contract amount was unknown.
For the cumulative nine months ended Sept 30, 2017, Green Packet posted a net loss of RM18.38 million, compared to a net profit of RM66.44 million a year ago on lower software and devices sales, while revenue came in flat at RM259.18 million from RM256.6 million.
On Feb 17 last year, Green Packet completed the subscription of a 20% stake in China-based Shenzhen Memo Technology Co Ltd for 10 million yuan cash.
Shenzhen Memo’s principal businesses are the sales of electronic products, import and export of domestic trading, goods and technologies, including the provision of smart-home Internet products and services and home OTT boxes.
Sources told The Edge Financial Daily that Shenzhen Memo will manufacture the set-top boxes for Green Packet, which will then supply them to MYTV.
“With 4.2 million households receiving the free digital television decoders, the business of managing these set-top boxes can spur other opportunities, such as digital wallets [which offer incentives] such as cash rebates where consumers can use to top up their services under MYTV,” a source said.
“There are some 7.2 million households in Malaysia, so apart from supplying to the 4.2 million BR1M (1Malaysia People’s Aid) recipients, Green Packet would also be able to sell the set-top boxes in the open market,” the source added.
In June last year, Prime Minister Datuk Seri Najib Razak announced that the government will give out free digital television decoders to 4.2 million BR1M recipients in Malaysia in phases until the end of this year. The free decoders, worth RM199 each, would be provided by the government to bridge the gap between rural and urban communities.
On Dec 15 last year, Green Packet also announced that it was teaming up with Asia Television Digital Media (M) Sdn Bhd (ATVM) — whose ultimate holding company is Hong Kong-listed Co-Prosperity Holdings Ltd — to jointly operate broadcasting television (TV) channels in Malaysia.
ATVM was reportedly desirous of collaborating with Green Packet and will invest HK$50 million (RM25.1 million) in the project.
Green Packet shares rose one sen or 1.75% to close at 58 sen yesterday, giving it a market capitalisation of RM435.59 million. The counter has risen 115% over the past year.