28-04-2015, 09:29 PM
Neat writeup from DB on Consistel:
Consistel views Singapore telecom market is ripe for disruption
Consistel is vying to become the 4th telecom operator in Singapore. It has recently signed an agreement with SMRT (BUY, TP S$2.32), has an option to invest S$34.5m in its venture (OMGTEL) subject to the venture obtaining a telecom license. We note MyRepublic, currently a fibre broadband player in Singapore has also announced its intention to bid for spectrum in upcoming auctions to secure a telecom license.
Conference call notes
■ Management track record – Consistel Chairman & CEO Masoud Bassiri highlighted a track record which spans rolling out networks across Asia and Africa, claiming around 22 network builds and 3000 in-building systems. He has previously worked at Motorola and Nortel and claims to have 10 patents to his name.
■ Software – Consistel believes its software (Atrium) is a key competitive advantage. It can automatically configure a network based on inputs on building configurations, traffic distribution, required network KPIs and financial data etc. A US patent search shows that Consistel has been awarded a patent for such a system on Mar 12,2015 (Pub No. US 2015/0073845). Consistel believes this avoids the current method of live trials which is costly and time-consuming.
■ Network size and capex – Consistel estimates a commercial launch will require 1250 base stations and 700 indoor sites, which they view as a relatively easy endeavor. He notes 40% of traffic (largely data) is generated indoors, an area of expertise for Consistel. It expects a buildout cost of S$750-1bn for a competitive network. For comparison, we note that M1’s cumulative capex till date is around S$1.5bn.
■ SMRT alliance – Consistel would aim to leverage the consumer touch points which SMRT can provide through its operations of rail and bus networks carrying 3m commuters.
■ Spectrum – Consistel would like to get spectrum in both sub-1Ghz and high-frequency bands. However, it is currently targeting 2.3Ghz spectrum. We note the incumbent’s licenses for 900Mhz spectrum expire in Mar/17 and hence an auction is likely in 2016.
Consistel views Singapore telecom market is ripe for disruption
Consistel is vying to become the 4th telecom operator in Singapore. It has recently signed an agreement with SMRT (BUY, TP S$2.32), has an option to invest S$34.5m in its venture (OMGTEL) subject to the venture obtaining a telecom license. We note MyRepublic, currently a fibre broadband player in Singapore has also announced its intention to bid for spectrum in upcoming auctions to secure a telecom license.
Conference call notes
■ Management track record – Consistel Chairman & CEO Masoud Bassiri highlighted a track record which spans rolling out networks across Asia and Africa, claiming around 22 network builds and 3000 in-building systems. He has previously worked at Motorola and Nortel and claims to have 10 patents to his name.
■ Software – Consistel believes its software (Atrium) is a key competitive advantage. It can automatically configure a network based on inputs on building configurations, traffic distribution, required network KPIs and financial data etc. A US patent search shows that Consistel has been awarded a patent for such a system on Mar 12,2015 (Pub No. US 2015/0073845). Consistel believes this avoids the current method of live trials which is costly and time-consuming.
■ Network size and capex – Consistel estimates a commercial launch will require 1250 base stations and 700 indoor sites, which they view as a relatively easy endeavor. He notes 40% of traffic (largely data) is generated indoors, an area of expertise for Consistel. It expects a buildout cost of S$750-1bn for a competitive network. For comparison, we note that M1’s cumulative capex till date is around S$1.5bn.
■ SMRT alliance – Consistel would aim to leverage the consumer touch points which SMRT can provide through its operations of rail and bus networks carrying 3m commuters.
■ Spectrum – Consistel would like to get spectrum in both sub-1Ghz and high-frequency bands. However, it is currently targeting 2.3Ghz spectrum. We note the incumbent’s licenses for 900Mhz spectrum expire in Mar/17 and hence an auction is likely in 2016.
