KUALA LUMPUR: Massive telecommunication infrastructure projects such as the 5G rollout via the Jalinan Digital Negara (Jendela) plan, should benefit services providers including REDtone International Bhd.
Affin Hwang Capital analyst Isaac Chow said the Malaysian Communications and Multimedia Commission (MCMC) had allocated RM7.4 billion for 2021-2022 to build and upgrade broadband services.
"The government also plans to invest RM21 billion through the Jendela plan over the next five years. While MCMC's allocation for 2021-2022 is significantly higher than its previous annual spending, we believe it has sufficient buffers in the Universal Service Provision fund to finance the investment," he said in a report today.
Chow said REDtone was participating in MCMC's RM4.6 billion Jendela works tender.
One of the main ongoing MCMC tenders is the infrastructure works at 1,661 sites with an estimated investment of RM4.6 billion.
"The tender includes (Part I) to build towers and its ancillaries; and (Part II) to install and operate network service equipment and provide 2G and 4G services for five years," he said.
Meanwhile, Chow said Part II of the tender would only open to licencees with both network facility provider (NFP) and network service provider (NSP) licences.
"REDtone is participating in the tender and is one of the few Universal Service Providers for the Part II of MCMC's Time III and Time III Extension projects, alongside Maxis Bhd, Digi.com Bhd and Celcom Axiata Bhd," he said.
REDtone is a provider of integrated telco and digital infrastructure services for organisations; under its telecommunication engineering arm, REDtone builds, which maintains and operates large scale WiFi and base stations.
Affin Hwang said higher managed telecommunication network services (MTNS) revenue and improved margin from telecom services had lifted REDtone's profitability over the last three years.
"At 15 times 12-month trailing price-earnings-ratio, the valuation is comparable to its average PER between Apr 2018 and October 2021," it added.