Instacom/OCK - benefit from budget 2014

In the face of it, industry observers opine that telecommunication contractors OCK and Instacom look likely to benefit the most from the government’s plan to spend rm1.5 billion on boosting rural internet connection over the next three years from 2013.

The Budget 2014 aims to increase internet coverage in the rural areas by building 1000 telecoms transmission towers.

This is bound to create opportunities for OCK and Instacom to secure contracts which will contribute positively to their margins.

However with a market cap of just around rm220 million each, the two companies could lose some of the jobs to smaller unlisted competitors that are already in the field. After all, telecoms are not difficult to build.

It is believed that OCK and Instacom would not be able to take on the whole project because the two companies could bite off more than they could chew by taking on the whole projects.

Principally, involved in the provision of telecoms network services, OCK has been handling projects for MAXIS, Celcom and DIGI. The group has also been awarded the necessary licenses by the MCMC to be a network facilities provider.

Instacom which has a strong presence in the telecoms industry via new subsidiary companies acquired in Oct 2012, has been generating good returns.

Its services vary from telecoms, civil, electricity and mechanical services to turnkey build and finance and fibre infra.

With over 10 years experience erection of telecoms towers, Instacom has worked with such companies as Celcom, DIGI, MAXIS, P1, U Mobile and YTL YES.

After completing jobs in Sabah and Sarawak, it started taking on projects in Peninsular Malaysia in mid 2004 because of demand.