Bullish tone for REDtone

This is definitely a turnaround year for REDtone International, says its managing director

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Puchong: REDtone International Bhd, a telecommunications service provider, believes the worst is over and it might return to the black in the current financial year, boosted by revenue from its broadband business. "This is definitely a turnaround year for REDtone. Barring unforeseen circumstances, we are likely to break even or be profitable this financial year (ending May 31 2012). As you know, we suffered a net loss of about RM11 million last year, so if we break even, it would mean an improvement of RM11 million ... that's a huge improvement," said its managing director Datuk Wei Chuan Beng in a Business Times exclusive. The company suffered a net loss of RM11.7 million for the fiscal year ended May 31 2011 against a net loss of RM5.4 million a year ago. REDtone has been posting net losses since its 2008 financial year and the market will be keenly watching its first-quarter results, due to be announced sometime this month, for an indication that the company has indeed made a turn for the better. Wei said the wider net loss previously was partly due to the roll-out of its wireless broadband network in East Malaysia, impairment of past investments in China and provision of doubtful debts, among others. "Our core businesses are showing positive signs. Voice business has been profitable for many years. "Our data business is also profitable now, our WiMAX broadband business in East Malaysia is very close to breaking even, and that's a very good progress." He said its broadband business was in an investment mode over the past few years, especially in East Malaysia. REDtone has now stabilised and Wei believes it is at a tipping point where the business can be profitable. REDtone now offers broadband services to close to 10,000 residential customers and 1,000 companies. Wei said that broadband will be a major growth driver for the firm. "Currently, the business contributes about 20 per cent to its overall revenue. Moving forward, especially when the LTE spectrum is awarded, we are looking at revenue contribution of more than 50 per cent in three to five years." REDtone is also banking on its new board of directors to push it to the next level. In July, it announced the appointments of Datuk Wira Syed Ali Syed Abbas Al Habshee as its deputy chairman and Datuk Ismail Osman as its senior executive director. "With the new board (members), I believe REDtone now has all the ingredients needed - the people, the technology, and the experience - to take itself to the next level and become one of the big boys in the telecommunications industry," said Ismail.