S i2i   

Sync Performance thro Innovation in Comm&Entertain

knn asking for money with back to back rights issue.. nb..

des_khor      ( Date: 26-Jan-2011 00:20) Posted: Ask money again !!

 

Ask money again !!

 

 

 

By LYNN KAN

Mobile handset distributor Spice i2i has bought over Sesular Group, an Indonesian mobile handset maker with 25 per cent of local market share, for US$175 million.

The acquisition propels Spice i2i into the big leagues of billion dollar revenue companies listed on the SGX.

 

look like i to i happen sooner 

 

 


Kelvin Tan, Selular Group - 22 Jun 2010
Efficient cash management and trade finance, combined with aggressive vertical integration,
meant that the Indonesian mobile phone company Selular was able to succeed despite the
recession.
2010 is looking good for Selular. The company has announced a predicted growth in profits of 20%, with
expected sales growth of 38%. Such impressive figures have been made possible through the company’s
strong strategic initiative in the uneasy market of 2008 and 2009.
Indeed, these predictions are a long way from where the company found itself in the last quarter of 2008.
Then, with the world in recession, we were presented with several challenges. Normally, the fourth
quarter is our best performing of the year, with Christmas, Chinese New Year and Muslim holidays all
falling during this period. Yet in 2008 this was not the case and our sales took a dive.
Problems also arose in Q4 in the form of currency fluctuations. In the space of a month, the exchange
rate of US dollars to Indonesian rupiah fell by 30%, making US$1 equivalent to 12,000 rupiah.
This drastic and rapid depreciation in foreign exchange (FX) rates was a blow to Selular, because we
import in US dollars and sell in rupiah. Our prices are pegged to exchange rates, so when there is such
fast change, sales inevitably fall. Indeed, sales dropped at the end of 2008 and - rather than restock in Q1
and Q2 of 2009 - we chose to run down our stock for as long as possible, clearing over three months
worth of stock before reordering.
Yet with economists predicting a bleak outlook for 2009, we needed a plan to pull through the recession
safely. As with any large business, there are fixed costs to maintain and, with 27 branches across
Indonesia, one option was to close some down.
Selular has previously focused on the higher-end phones such as Blackberry. However, this misses
around 70% of the Indonesian market, which uses phones costing under US$100. Therefore it seemed
sensible for us to examine the lower end. However, we decided upon a more positive path.
As we were already a distributor of Sony Ericsson, Motorola, Blackberry, Samsung, Nokia and HTC
throughout Indonesia, a potential area of growth for us was the local market. The lower end of the
Indonesian market is dominated by Nokia, and Nexian, which is a distinct local brand. Having previously
worked with Nexian - and given that we were looking to expand in to the lower end of the market - we
purchased a majority stake in the company. The acquisition of Nexian meant that we could vertically
integrate into handset manufacturing without having to start a local brand from scratch. And as Nexian
already made phones in China, it had built up expertise as a Chinese original device maker (ODM) buying
phones and finding technical solutions with manufacturers and operators. We could not have achieved
this on our own at such speed.
Despite the potentially difficult timing of the acquisition, Nexian and Selular sit well together. Selular has
strong financing and credit facilities, and strong distribution and retail, which carry advantages for the

smaller Nexian. The fact that in the six months after the acquisition, Nexian sold 2.5 million handsets and
achieved a turnover of US$150m speaks volumes for the success of our strategy to grow our way out of
the downturn. Telkomsel, a local service provider, now has 1.8 million subscribers using Nexian
handsets, while XL Axiata has another million. As total phone sales volume in Indonesia is 1.8 million
units, Nexian is crucial to our business.
The financing of the deal was executed through a working capital facility. This was arranged and
executed by Falcon Trade Corporation, who offered a financing package based on their strong knowledge
of the company. Our relationship with Falcon has been built up over several years, having evolving from a
strong trade services-related partnership.
Cash Management
One challenge of the acquisition, however, was that it further complicated the structure of the business,
making it vital for our cash management needs to be handled effectively. And with retail outlets
nationwide selling own brand and other products, the efficient movement and handling of cash became
more vital than ever.
For the past five years, Selular’s cash management needs have been met by a basic enterprise resource
planning (ERP) system, Microsoft Navision. It is connected live via a server in Jakarta, making it possible
to see money coming in to all our outlets on a minute-by-minute basis.
For retail sales, cash is banked on the same day or the following morning. Each branch has a bank
account, the contents of which are swept into a central account that can be accessed online.
As money coming in and going out can be seen on an up-to-the-minute basis, the weekly cash flow
forecast can be predicted more accurately because of the centralised cash management system (CMS).
Our forecasts are two months ahead and their accuracy has a major impact on our foreign currency as
well as our working capital management needs.
As stated, we buy in US dollars and therefore need to purchase US dollars every day. The centralised
system means that Selular can avoid overbuying. Also, the system prevents pockets of idle cash from
being unused, meaning our level of borrowing has been significantly reduced. Indeed, Selular’s overdraft
has been reduced by around 20%.
We also have an internal system for working capital optimisation, driven by the weekly estimates and
cash flow forecasts. We can show balance sheets and incomings on a screen on a daily basis. All branch
numbers are consolidated onto one system, so that cash requirements are efficiently managed.
In order for our working capital to be optimised, we have also used trade financing facilities. For example,
Sony Ericsson - of which Selular is a major distributor - can give us credit for 30 days, but this is only a
partial benefit in a cash cycle that takes two to three months to complete. Falcon Trade is a major partner
in providing for the shortfall with invoice discounting of up to 180 days. Falcon provides invoice financing
in US dollars - and this plays a vital part of our cash management strategy. Meanwhile, we use local
banks for rupiah financing. There is also a standby letter of credit (LC) facility that covers any credit risk to
the vendor.
Outlook for 2010
The success of the Nexian acquisition has helped our recovery from the recession, allowing us to look
forward with optimism. The Indonesian market has huge potential growth. Of the country’s population of
250 million, only 120 million own a mobile phone, meaning over 50% of the population remains
phoneless. If Selular can tackle this area of the market, the opportunity for growth is vast.
In this respect, Nexian will provide Selular with many more opportunities to penetrate the market in
Indonesia. There are four million Nexian users in Indonesia and, by the end of 2010, the aim is to reach
10 million. To achieve this, Nexian must become a brand that is relevant to the local market, which we
think is possible by following the local fashion for phone accessories. Indonesians are particularly keen on phones with a ‘QWERTY’ keyboard for texting and email and our
aim is to make Nexian fit in with this trend. Indonesians are also keen on using their phones for chatting
and Facebook. The aim is to create a Nexian messenger - similar to Blackberry messenger - that will help
to create a local community of Nexian users.
Applications (apps) for phones can also be used to win over the local market. As a rapidly expanding area
of the global phone market, Indonesians are keen on buying apps for social entertainment and business
uses. We see apps becoming as important as - if not more important than - phones themselves. One way
for Nexian to take a slice of this is to give away apps specifically designed for the local market. And as
part of our vertically-integrated business model, Selular is planning to acquire an apps company, which
would help to drive local interest in apps whilst ensuring that it can take a share of the money to be made
in this area. Offering local apps is perhaps the most effective way of achieving this.
 

 

 

hopefully not another rights 

Spice i2i to acquire Indonesia's Selular Group for US$175m

 

normally dun halt, so is either very bad or good news...

 

consolidating for far too long...

 

 

 

 

The Spice family

 

 

Prestige

 

Bhupendra Kumar Modi, billionaire chairman of mobile technology and
entertainment conglomerate Spice Global, is guided by two words —
unconventional wisdom. Lauren Tan reports

 

T
echnology will lead to global unity.
So says the billionaire technopreneur bhupendra
Kumar  Modi  from  his  63rd  foor  Singapore
penthouse,  one  of  the  14  residences  he  keeps
around  the  world  to  feel  at  home  wherever
business takes him. “the whole world is changing
and  technology  is  helping  it.  today  when  you
communicate with someone through technology,
you  see  them on  the  small  screen. tomorrow,  that  small  screen will be
blown  up. when  that  happens,  people will  forget which  country  they
belong to,” he explains.
Modi is the man who brought the frst mobile phone, the frst 3 1/4”
foppy drive, the frst facsimile machine and the frst photocopier to his
native india. dressed  this afternoon  in his  trademark Panama hat — or
perhaps soothsayer’s cap — and vest combo, the 62-year-old continues in
his melodic roar: “i think politicians and religious leaders will have a tough
time. but naturally, businesses will have a good time!”
Singapore, the current headquarters of his Spice global conglomerate, 

......... 

 

 

steady steady steady for many months .......

 

This share is the worst performing in the last decade.


 

Number of new handset players jumps to 68 in Q3

By S Shyamala Dec 29 2010 , Chennai

 

patience, every stock got its day...

 

this is one of my worst performing stock for the entire year, very disappointed....., especially took up excess rights issue some more.

 

steady.

 

 

 

 

 

chart says ave consolidation period is going to BIG BAND

 

starts......

 

Skype CEO Bates Says New Products, Corporate Partnerships Will Fuel Growth

Skype Technologies SA Chief Executive Officer Tony Bates will fuel growth by adding corporate partnerships and hiring engineers to build new products as the company readies for an initial public offering.

Bates, who joined the Internet calling company in October from Cisco Systems Inc., said in an interview Dec. 20 that agreements with other companies will be an increasingly important part of Skype’s development. He plans to hire as many as 500 people next year, most of whom will be engineers, to focus on new products and make sure that consumers have the same experience using Skype on their phone, desktop or television.

“More and more of us are living in a world of mobility that started off as convenience but now is becoming a richer form of communication,” said Bates, 43, at the company’s new 90,000-square-foot office in Palo Alto, California. “What we think is most powerful is not one modality -- it’s how multiplatform you can become. Consumers want choices.”

Bates faces the challenge of building new sources of revenue and coaxing money out of Skype’s more than 560 million users, of which only 1.4 percent pay for the service, according to a regulatory filing. Skype, which started as a way for consumers to chat for free, is developing premium services such as group video calling, pursuing corporate accounts and plans to raise $100 million in an IPO.

“Companies like Skype have a tremendous amount of opportunities,” said Bates. “You have to focus on the things that matter.”

Growing Pains

The company also faces growing pains as the number of users expands. Today, some Skype users had difficulty logging on to the service, a matter Skype said it was investigating.

Skype, based in Luxembourg, is using the Palo Alto office to attract Silicon Valley talent. Employees use phoneless conference rooms to communicate with headquarters, relying on Skype instead of traditional speakerphones.

Skype has agreements with carriers Verizon Wireless and KDDI Corp., Japan’s second-largest mobile-phone operator. Deals with Samsung Electronics Co., Panasonic Corp. and LG Electronics Inc. have led to Skype software being pre-installed on 40 million high-definition televisions, Bates said.

For the fiscal year that ended Sept. 30, Skype reported revenue of $830 million and earnings before interest, taxes, depreciation and amortization of $170 million, according to Naveen Sarma, an analyst at Standard & Poor’s in New York.

Estonian Roots

The company is the largest provider of international calling, accounting for about 12 percent, according to Washington-based research firm TeleGeography. EBay Inc., which bought the Estonian startup in 2005, sold most of its stake last year for about $2 billion to a group led by Menlo Park, California-based private-equity firm Silver Lake.

Bates dropped out of his studies as a mechanical engineer after one year at London Southbank University. His first job was loading time-shift punch cards into a computer in the early 1980s. His early work with computers and networking fed his hunger to learn more and provided valuable experience watching the industry transition from academia to the commercial realm, he said.

Bates said he hopes to build on that experience as well as on his insight gained from sitting on the board of YouTube, the video site owned by Google Inc.

“We’ve got great challenges that people want to work on,” Bates said. “You’re going to start to see us ramping up products.”