REDtone International Bhd, a database and provider of broadband services listed on the Malaysia’s stock market, has embarked on a strategy of divesting assets. REDtone is no longer in the hyper-competitive Internet protocol television (IPTV) business and wants to focus completely on the growth of broadband and data services market for the following year, according to a source in the enterprise.
However, the voice business will continue to be their source of income. As part of its strategy to reposition its business in a company mainly the voice data and broadband services, REDtone has divested its stakes in three non-core businesses recently.
These are REDtone Multimedia Sdn Bhd, REDtone Software Sdn Bhd (research and development in the Voice over Internet Protocol equipment the customer) and REDtone Mobile Sdn Bhd (distribution and sale of prepaid calling services discount to market retail in Malaysia).
With these divestments, earnings REDtone the future "and not be overwhelmed by these businesses at a loss", according to a recent investigation by Netresearch-Asia Sdn Bhd.
Information about leaving IPTV first made headlines in the presentation of change of the company on July 30, along with its fourth quarter financial year 2012 (4QFY12) report.
REDtone has suffered losses over the last four years. Its income was stable in 4QFY12 RM22.7 billion, but returned to profitability with net profit of RM2.5 million in the quarter compared to RM8 billion in losses for the same quarter last year .
According to the report of the investigation, the return to profitability was mainly REDtone Divestment Strategy. "This was mainly due to a network of de-consolidation of RM3.4 million gain arising from the sale of its 80% stake in Multimedia REDtone, which is involved in delivering Internet TV," says the report.
On April 20, Swift Consolidated Sdn Bhd Bell bought 80% of REDtone Multimedia, while the remaining stake was sold to CCSB Consulting Sdn Bhd on June 7.
It is understood that its strategy was to promote IPTV content in Chinese, competing with Telekom Malaysia Bhd and Astro (TM) HyppTV.
In recent times, has been aggressively pushing REDtone broadband and data services. The company has been in the media attention for its recent change in which the company attributed to the growth data and broadband services, an increase of revenue 19.5% to RM107 million.
REDtone also signed an agreement with TM to provide broadband services. REDtone currently has about 4,500 WiFi hotspots across the country.
In July, REDtone sealed another deal that will allow you to utilize and share broadband infrastructure Sdn Bhd Maxis. The agreement will see REDtone share Maxis long-term development of the infrastructure of 2,600 MHz of spectrum, in an effort to deploy ultra-high speed 4G broadband services.
With the sharing of infrastructure, both Maxis and REDtone will be able to offer the fastest speed 4G broadband up to 150 Mbps in the country.