CNET : News : Story Friday, January 21, 2000 

Analysts skeptical about Time dotCom's Net intentions
By Julian Matthews
Friday, January 21 2000

KUALA LUMPUR--Two analysts have voiced skepticism on whether Time Engineering Bhd's name change of its telco holding company to Time dotCom Bhd would put the debt-ridden company back on track.

"It takes more than a change of name to become an Internet company. It may be just an attempt to benefit from Internet euphoria," said Bertrand Bidaud, Gartner Group director of telecommunications for Asia-Pacific.

Richard Jacobson, senior Internet analyst for IDC Asia-Pacific concurred: "They may have changed their name but whether they have an Internet strategy in place is uncertain."

Both analysts were reacting to the name change announced Monday from Time Telecommunications Holding Bhd to Time dotCom Bhd.

Time revamped its executive board this week and suggested to the Kuala Lumpur Stock Exchange of an "alternative fallback strategy" that may see it listing its telco companies as a means to rid its estimated RM4.5 billion debt.

Time has also spurned at least three bids to rescue the company brokered by the government's Corporate Debt Restructuring Committee because the offers were deemed "insufficient".

Time Engineering's shares have been attracting investor interest for almost a month on the KLSE and shot up this week from RM2.40 at Monday's close to a spectacular RM3.26 today.

It reached an intraday high of RM3.60 today driven largely by what some analysts said was speculative buying. Three months ago the counter was wallowing at less than a ringgit.

Gartner's Bidaud said Time has invested a lot in infrastructure but has little cash flow to show against this investment.

"The Internet business is extremely competitive. The most competitive of all. Most companies are losing money in the early stage. If you start from scratch, you take on debt.

Here, the rational is 'We already have the debt. We are an Internet company'. To imagine that it is easy to make money with the Internet is an illusion. Time dotCom has to come up with more than a name change," he said.

Time dotCom claims to have an estimated 250,000 mobile phone subscribers, 100,000 fixed line subscribers and 80,000 payphone lines. Last month, it launched its Internet service with an aim to garner 250,000 subscribers.

Bidaud said Time's cellular operation is "not doing very well" relative to established brand names Digi, Maxis and TMTouch.

"The ISP business is also a difficult market to address given dominant players like TMnet and Jaring, and soon, probably strong competition from brandnames like Maxis and Celcom. Time has to demonstrate that it can do better there than in the cellular space."

IDC's Jacobson said being a dotcom company goes beyond just Internet access or being an ISP. "You need to be deploying products and services across the Internet and become a channel for e-commerce to take place," he said.

Jacobson said if Time dotCom was serious about the Internet he would expect a "splash of marketing dollars" to raise brand awareness. "People don't know who you are unless you are out there. Judging from its history, I expect that to happen in coming months."

Jacobson said the company's main asset is its peninsula-wide 5,200km long fiber optic network that can be a platform to develop higher value-added businesses besides its core fixed-line and mobile services.

"They should consider developing it as a platform for companies to come onboard and become application service providers (ASPs) or offer other IP-related services," he said.

Jacobson conceded, however, that it was still too early to judge Time dotCom's Internet fate as the company has an array of telco licenses and "powerful connections."

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