TM INTERNATIONAL Bhd's (TMI) (6888) investment in a local mobile virtual network operator (MVNO) is unlikely to pose a major threat to incumbent operators, a research firm says.
OSK Research Sdn Bhd said the RM2.6 million investment in Tune Talk Sdn Bhd via wholly-owned Celcom (M) Bhd, announced on Tuesday, follows TMI's earlier alliances with two other MVNOs, namely Merchantrade and Redtone, and U Mobile, a hybrid mobile network operator (MNO).
"Overall, we are neutral on the (TMI's Tune Talk) investment given that MVNOs have very patchy track record overseas and are not likely to be a major threat to incumbent operators," the firm said in a note yesterday.
The investment by Celcom confirmed market talks months ago.Tune Talk, it noted, was slated to launch commercial service in the second quarter 2008, but the launch was postponed pending the award of a Network Services Provider (NSP) licence from the Malaysian Communications and Multimedia Commission.
OSK Research said once it is launched, Tune Talk will raise competition by a notch, putting further pressure on operators' margins, which are already crimped with the introduction of MNP in October.
It expects Celcom and Tune Talk to leverage on the strong paternal links with AirAsia and Tune Hotels to aggressively market Tune Talk products and services with substantial cross-selling potential for the foreign travellers and workers market (via Merchantrade).
"We expect Tune Talk to target the no-frills or low-cost subscribers with a basic voice and SMS product.
"OSK Research added that since it would likely purchase wholesale minutes from Celcom at a slightly higher price, Tune Talk would not be able to price its tariff as competitively as the incumbent operators.
The firm maintains its "neutral" call on TMI, with a target price of RM4.20.
- By Zuraimi Abdullah (Business Times)
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