Got the following set of comments from the posting: Green Packet: 11th Consecutive Quarters Of Losses, 33 Months Of Losses And....
- A Better PJ said...
For an infrastructure business GP are doing pretty well with some positive trends on EBITDA, revenues and very importantly customer churn rates of below 5% (below telco sector average) and P1 subscriptions growing by over 20,000 per quarter...without much A&P.
All of this indicates good progress on service delivery, customer satisfaction and financials.
Ebitda is validly a more relevant measurement of operational performance for a business in its infrastructure development phase because it indicates more accurately a business's ability to generate cash.
Real success measurement for a mature broadband/telco p[layer would be the combination of market share (subscribers), churn (satisfaction levels), ARPU (customer value).
P1 4G has maintained very impressive ARPU (RM 81) and churn (4%) particularly for a start up....so the tipping point will arrive when it reaches a critical mass of subscribers....as indicated by the ebitda positive target of 280,000 subscribers.
I hope this will help with to balance the impression given by your article(s).
Many thanks for your valued comments and I certainly am more than happy to publish your comments for all to read.
Just a brief comment on the EBITDA thingee. I am sure you are aware that I had been blogging on Green Packet for a long time now. See the label Green Packet for the rest of the postings. The point is Green Packet had been saying and saying and saying EBITDA positive since Feb 2008. It's now Nov 2010. Now of course, I am more than wrong, but if I were given a choice to make a feedback, I would dearly hope to see the management focus MORE on the company's performance than continuous shouts to the investing public that they are going to be EBITDA positive by such and such a date. To my flawed eyes, they are like desperately trying to sell their company. I would have preferred them to show more and talk less. That's my flawed view.
Now Green Packet had been stressing out loud they can be profitable IF they hit that 280,000 subscribers.
Now I am confused.
Seriously.
Let me use the following article dated Sep 2010, as a point of reference (I do hope the article data is correct): Green Packet: Stepping up subscriber acquisition. The following statement from it.
- The acquisition of new subscribers slowed to 35,000 in 1Q10, after hitting a high of 43,000 in 4Q09, and declined further to 21,000 in 2Q10. This was partly attributed to the company’s move to focus on enhancing its network quality — including additional capacity for congested sites — and customer service in the last few months.
43,000 in 4Q09, 35,000 in 1Q10 and 21,000 in 2Q10.
Now that's a declining rate, yes?
In 2Q10, Green Packet said it has 196,000 subscribers. ( source: here ) On today's Star Biz article, GPacket aims to double revenue to RM400m, Green Packet said it has 218,000 subscribers. An addition of just 22,000.
Which means 43,000 new subscribers in 4Q09, 35,000 new subscribers in 1Q10, 21,000 new subscribers in 2Q10 and 22,000 new subscribers in 3Q10.
And Green Packet's target is 280,000 by the next 2 quarters.
Well, I am confused and I am asking myself if the 4 most recent quarters of new subscribers growth suggest that the target of 280,000 is possible?
How?
Well I guess it won't be a big deal because all Green Packet has to do is come out and say their target is delayed by another quarter or two.
And then on the Edge Financial Daily: Green Packet on track to be profitable by 1Q
- Over the years, Green Packet has already incurred RM534 million in capital expenditure
WOW!
Over rm 534 million spent. Another 40 million is said to be spend on advertising and promotion according to the Business Times article this morning.
Huge numbers eh?
And if and when Green Packet achieves being profitable, I wonder when if they will ever recuperate their cost of investment.
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