Digistar in talks to extend IPTV service

PETALING JAYA: Digistar Corp Bhd is in advanced stage of negotiation with a party to provide Internet Protocol Television (IPTV) services to 22 hospitals.

Digistar has the largest market share for IPTV services among Malaysia’s private hospitals. It has 10-year contracts to provide IPTV services to 15 private hospitals.

The IPTV segment currently contributes 10% to Digistar’s revenue. The company plans to increase this to between 25% and 30% soon.

Over the next two to three years, Digistar will be bidding for RM2bil to RM3bil worth of jobs as TV networks and production facilities in Malaysia make the transition from analogue to digital television broadcasting before the 2015 deadline.

“The next few years will be very exciting for us. Worldwide, there are only some 14 to 15 companies that can do what we do,” said managing director Datuk Lee Wah Chong.

“With the digitalisation of RTM, the development of the Iskandar region and more healthcare facilities being set up, we will be extremely busy in Malaysia. We also plan to expand into the Asia-Pacific region as there are still many countries that have not adopted the digitalisation system,” he said.

Hong Kong, Taiwan and Singapore are in the final stages of migrating their analogue TV channels to digital.

Under the 10th Malaysia Plan, the Government has allocated RM2bil for local TV stations to transform their analogue system to digital.

“Opportunity lies in the migration of TV operators’ broadcast platform from analogue to digital,” said an analyst who tracks Digistar. Currently, Digistar is the market leader in the conversion of standard definition to high-definition content.

On another note, Lee said the group had submitted its application to transfer to the Main Market of Bursa Malaysia.

By next year, Digistar will open its regional office in Singapore for its Asia-Pacific expansion in the IPTV and broadcasting segments.

In the next quarter, it also plans to launch its latest offering – a central monitoring system for alarm systems. Lee expects this segment to start contributing to revenue in the coming financial year.

Digistar’s order-book as at Sept 30 stood at RM130mil, and it is currently tendering for RM208mil worth of jobs.

Reflecting the traction in the industry, Digistar’s net profit increased 85.84% to RM4.04mil despite a 9.78% fall in revenue to RM21.84mil for its fourth quarter to Sept 30. On a full-year basis, net profit increased 343.78% to RM19.06mil, or 9.48 sen a share, from RM4.29mil, or 2.36 sen a share, previously.

The company has RM29.57mil cash on its books and almost zero borrowings.