Samart shifts to expansion
SET-listed
Samart Corp is shifting from a holding company to an operating unit, seeking to get into the digital innovation business through mergers and acquisitions (M&A).
The latest move aims to ensure the growth of Samart Corp by business expansion, not just awaiting annual dividends from subsidiaries, said president Watchai Vilailuck.
Mr Watchai said the move synchronises with a plan to list Samart Transolutions on the Stock Exchange of Thailand this year.
Samart Transolutions was established in 2007 and holds 100% of Samart Corp’s Cambodia Air Traffic Services (CATS), a 15-year-old air traffic service company.
“Once the company is listed, Samart Corp will cease to be a pure holding company that does not own any value businesses,” Mr Watchai said.
The company needs to create new revenue streams to benefit its shareholders and is seeking new business opportunities in digital innovative development.
Mr Watchai would not elaborate on investment budget or M&A targets, saying only that Samart will invest directly in interesting tech startups and the M&A model.
“We are only interested in digital and innovative business,” he said.
Samart Corp operates four major business groups: digital and mobile multimedia under Samart Digital (formerly known as Samart I-Mobile); information and communications technology solutions and services by Samart Telcoms; technology-related businesses under Samart Engineering, which operates TV antennas and set-top boxes for digital TV; and utilities, transport and power plants, including businesses in Cambodia, CATS, Samart U-Trans Myanmar, Samart U-Trans Lao and Samart Waste 2 Power.
Samart Telcoms generates 50% of total revenue for the group, followed by utilities and transport businesses, which generate about 30%.
Last year, Samart Corp scaled down its major corporate business of mobile services operated by Samart I-Mobile (SIM) after struggling with losses caused by intense market competition.
The 12-year-old mobile business arm SIM was renamed as Samart Digital last year and focuses on selling digital trunk radio.
Mr Watchai said Samart Digital expects to complete its business turnaround plan by 2019 and contribute significant revenue to the group.
SIM began providing mobile service under TOT’s 2100-megahertz network in 2009. Subscriptions hit a peak of more than 700,000, but later fell below 10,000 in April 2017.
SIM officially exited the mobile segment in June after the company submitted a request to the telecom regulator in April to stop providing service under the mobile virtual network operator (MVNO) model.
An MVNO is a company that provides mobile services but lacks its own mobile network, renting mobile network capacity from other firms to provide service.
Mr Watchai said Samart Corp aims to earn 20 billion baht of total revenue this year, thanks to rapidly growing ICT investment in domestic enterprises and the government’s digital economy policy.
Samart Telecoms is expected to contribute to 50% of the targeted revenue, with 30% generated by the utilities and transport business.
Mr Watchai said Samart Telcoms has backlog projects worth up to 20 billion baht this year. It plans to establish a new subsidiary Samart Secureinfo as an end-to-end cybersecurity solutions company.
Samart Secureinfo will be set up by June and will be wholly owned by Samart Telcoms, working with IBM as a partner.
“This year will be one of chances and business expansion for the group, particularly in utilities and transport,” Mr Watchai said.
Samart Corp earned total revenue of 13.8 billion baht in 2016, which significantly declined in 2017 because of losses in the mobile business. The company has yet to complete its official financial statements for 2017.