5. INFORMATION ON OUR GROUP 5. INFORMATION ON OUR GROUP 5.1 HISTORY AND BUSINESS OVERVIEW OF OUR GROUP 5.1.1 Information on Sedania Innovator Sedania Innovator was incorporated in Malaysia on 17 December 2013 under the Act as a private limited company under the name of Sedania Innovator Sdn Bhd. On 22 September 2014, our Company converted to a public limited company to serve as the investment holding company for the Sedania Innovator Group. As at 22 July 2014, the authorised share capital of Sedania Innovator is RM50,000,000 comprising 500,000,000 Shares. Subsequent to the acquisition of IDOTTV on 24 July 2014, the issued and paid-up share capital of Sedania Innovator increased from RM20 to RM14,853,300 comprising 148,533,000 Shares. Sedania Innovator is principally an investment holding company whilst our Group is engaged in the business pertaining to or connected with telecommunications and IT which includes multimedia products and all other related activities. IDOTTV, our subsidiary is a platform provider and service enabler specialising in providing ancillary services to the mobile subscribers in Malaysia and Bangladesh. Our Group’s current corporate structure is as follows: Sedania Innovator 100% IDOTTV
5.1.2 History of our Business The history of our Group can be traced back to the incorporation of IDOTTV on 29 January 2004 under the name Illusionsdottv Sdn Bhd. Datuk Noor Azrin bin Mohd Noor, our founder and promoter, established IDOTTV as an investment holding company engaged in the business pertaining to or connected with telecommunications and IT which includes multimedia products and all other related activities. He is the Managing Director of Sedania Innovator and has been in the media and telecommunication industry for seventeen (17) years. Details of Datuk Noor Azrin bin Mohd Noor’s experiences are set out in Section 8.1.2 of this Prospectus. Envisioning a future in mobile technology, IDOTTV progressed to develop ancillary services for mobile subscribers in Malaysia. IDOTTV introduced the ATS platform, designed to allow mobile subscribers to transfer Airtime Credit amongst one another within the same network, anytime and anywhere. The ATS Transfer platform was commercially launched in December 2004 as Celcorn Airtime Share. Following the launch of Celcom Airtime Share, IDOTTV launched the ATS Request platform as Celcom Airtime Request in August 2005, which enables mobile subscribers to send requests for Airtime Credit from other mobile subscribers under the same network. In 2006, IDOTTV was awarded the MSC Malaysia Status by MDeC for a period of five (5) years, which was extended for another five (5) years to 2016 on 15 July 2013. As an MSC status company, the Company enjoys income tax exemption of up to ten (10) years for promoted activities as well as eligible for R&D grants from MDeC. Further benefits of an MSC status company are set out in Section 10.4 of the Executive Summary of the IMR Report. In 2008, IDOTTV marked a new milestone when the number of ATS transactions by Celcom subscribers hit 300,000 transactions per day. Subsequently in 2009, we exceeded the record and reached 400,000 ATS transactions per day by Celcom subscribers.
5. INFORMATION ON OUR GROUP (cont’d) Celcom extended our contract for the Celcom Airtime Transfer and Celcom Airtime Request solutions in 2009,2010 and 2015, respectively. More details on the ATS Transfer and ATS Request solutions is set out under Section 6.1 of this Prospectus. In 2011, Datuk Noor Azrin bin Mohd Noor led our R&D team to conceptualise and develop the paperless, eco-friendly GreenBilling© mobile application, a mobile application that serves as a central depository consolidating numerous billing services to enable the subscribers to manage all their electronic bills, balances and transactions together in a single screen. A new product for our Group, the GreenBilling© mobile application has currently been released in the beta version and will be launched in stages over the next fifteen (15) months. Further details on the GreenBilling© mobile application are set out in Section 6.1.3 of this Prospectus. In 2011, our Group also undertook a strategic review to streamline our operations to focus on the ATS Solutions business and become a fUll-fledged platform and service enabler, specialising in providing ancillary services to the mobile subscribers. The business strategy was based on our key management’s assessment of the growth potential of our ATS Solutions compared to the other products and services after taking into consideration, the track record of our ATS Solutions and the potential to introduce a wide range of new products using the existing ATS platform. In line with the streamlining of operations, by 2012, all noncore businesses were transferred out of IDOTTV to our holding company, SCSB and its subsidiaries. Additionally, certain non-core business such as SMS broadcast, SMS alert services, mobile billing, mobile content and Islamic content amongst others were transferred out of IDOTTV to Mobtivate, which was eventually disposed to SCSB in 2014. Further information on the disposal of Mobtivate and the streamlining of operation are set out in Section 5.5(b)(i) and Section 12.2(iii) of this Prospectus respectively. In 2013, our Group was selected to join the TERAS program under TERAJU which aims to provide business opportunities and assistance in terms of human capital and funding. In June 2013, our Group entered into a contract with Rayyan Global for the provision of our ATS Solutions to the subscribers of Maxis. In the same year, we had entered into a contract with SIB, for the provision of our ATS Solutions to the subscribers of Robi Axiata in Bangladesh. Over the years IDOTTV, has received several endorsements as an innovative company through awards and recognitions such as the Quality and Technology award in Gold Category from The International Arch of Europe Awards in 2011, the Corporate Social Responsibility Leadership Awards from the Asia Pacific Young Business Conference and the Sustainable Growth Award for the GreenBilling© Application from WITSA Global ICT Excellence Awards in 2012. Further details on the awards and recognitions are set out in Section 5.2 of this Prospectus. 5. INFORMATION ON OUR GROUP (cont’d) 5.2 OUR KEY DEVELOPMENT AND MILESTONES The table below sets out our Group’s key development and milestones over the years: Period Description 2004 • Incorporation of IDOTTY to develop media content • Ventured into mobile technology and innovation
• Collaboration Agreement with Celcom for the provision of Celcom Airtime Share services
2005 • Commercially launched Celcom Airtime Request services 2006 • Granted MSC Malaysia status company by MDeC 2008 • ATS transaction with Celcom hit 300,000 transactions per day 2009 • ATS transaction with Celcom hit 400,000 transactions per day • Renewal of agreement with Celcom for the provision of our Celcom Airtime Share 2011 • Conceptualised the eco-friendly GreenBilling© mobile application • Winner of The International Arch of Europe Awards (Frankfurt) by Arch of Europe for Quality and Technology in Gold Category 2012 • Winner of Corporate Social Responsibility Leadership Awards at Asia Pacific Young Business Conference • Winner of WITSA Global ICT Excellence Awards (Montreal) -Sustainable Growth Awards for GreenBilling© Application 2013 • Selected for the TERAS program under TERAJU • Signed agreement with Rayyan Global for provision of ATS SOlutions to Maxis subscribers
• Entered into an agreement with SIB for provision of ATS SOlutions to subscribers of Robi Axiata in Bangladesh
2014 • Commercially launched ATS with Robi and Maxis • Received award from Celcom Digital Service for Highest Growth Service for ATS Celcom 2013
• Conceptualised and introduced Application based ATS for multiple MNOs
• Launched GreenBilling© Beta version
• Launched Credit SOS with Celcom
2015 • Selected under Syarikat Skim Jejak Jaya Bumiputera (SJJB) programme • Supplemental Agreement with Celcom for the provision of Celcom Airtime Share and Celcom Airtime Request services until 2020 [THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
5. INFORMATION ON OUR GROUP (cont’d) 5.3 SHARE CAPITAL Our authorised share capital is RM50,000,000 comprising 500,000,000 Shares, of which RM14,853,300 comprising 148,533,000 Shares have been issued and fully paid-up. Upon completion of our Public Issue, our issued and paid-up share capital will be increased to RM20,000,000 comprising 200,000,000 Shares. The movements in our issued and paid-up share capital since the date of our incorporation are set out below:
17.12.2013 2 1.00 Cash 2 2 22.07.2014 18 1.00 Cash 20 20 22.07.2014 0.10 Share split 200 20 24.07.2014 148,532,800 0.10 Issued pursuant to the 148,533,000 14,853,300 acquisition of IDOTTV
There are no discounts, special terms or instalment payment terms applicable to the payment of consideration for the above allotments. As at the LPD, there are no outstanding warrants, options, convertible securities or uncalled capital in our Company. [THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
5. INFORMATION ON OUR GROUP (conf’dj 5.4 INFORMATION ON IDOTTV a) History and business IDOTTV was incorporated in Malaysia under the Act as a private limited company on 29 January 2004 under the name Illusionsdottv Sdn Bhd. IDOTTV assumed its present name on 23 March 2004 and commenced operations in 2004. IDOTTV is principally engaged in the business pertaining to or connected with telecommunications and IT which includes multimedia products and all other related activities. IDOTTV is a platform provider and service enabler specialising in providing ancillary services to mobile subscribers in Malaysia and Bangladesh. b) Share capital As at the LPD, the authorised share capital of IDOTTV is RM25,000,000 comprising 25,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital of IDOTTV is RM14,000,000 comprising 14,000,000 ordinary shares of RM1.00 each. Details of the changes in the issued and paid-up share capital of IDOTTV since its incorporation up to the LPD are as follows:
29.01.2004 2 1.00 Cash 2 20.02.2004 9,998 1.00 Cash 10,000 02.02.2005 240,000 1.00 Cash 250,000 28.02.2007 1,750,000 1.00 Otherwise than cash 2,000,000 21.07.2014 12,000,000 1.00 Otherwise than cash 14,000,000 c) Shareholders IDOTTV is a wholly-owned subsidiary of Sedania Innovator. d) Subsidiary and associated companies As at the LPD, IDOTTV does not have any subsidiary or associate company.
5.5 SUBDIVISION OF SHARES AND ACQUISITION In conjunction with, and as an integral part of our Listing, we undertook the following subdivision of shares and acquisition: (a) Subdivision of shares On 22 July 2014, we effected a share split of everyone (1) existing ordinary share of RM1.00 each in the authorised and issued and paid-up share capital of Sedania Innovator into ten (10) Shares, resulting in an authorised share capital of RM400,000 divided into 4,000,000 Shares and an issued and paid-up share capital of RM20 divided into 200 Shares.
5. INFORMATION ON OUR GROUP (cont’d) (b) Acquisition of IDOTTV Our Company had, on 24 July 2014, entered into a sale and purchase agreement with SCSB and Datuk Noor Azrin bin Mohd Noor to acquire the entire issued and paid-up share capital of IDOTTV comprising 14,000,000 ordinary shares of RM1.00 each for a purchase consideration of RM14,853,280 satisfied wholly by the issuance of 148,532,800 Shares in Sedania Innovator. The purchase consideration for IDOTTV was arrived at on a willing-buyer willing-seller basis, after taking into consideration the audited NTA of the IDOTTV group of RM14,853,283 as at 31 December 2013. The shareholdings of SCSB and Datuk Noor Azrin bin Mohd Noor in Sedania Innovator pursuant to the acquisition of IDOTTV are as follows:
SCSB 11,200,000 80 11,882,624 118,826,240 Datuk Naar Azrin 2,800,000 20 2,970,656 29,706,560 bin Mahd Naar Total 14,000,000 100 14,853,280 148,532,800
Concurrently, SCSB had on 24 July 2014 acquired 200 Sedania Shares from the two (2) shareholders as set out in Section 8.3 of this Prospectus. Upon completion of the acquisition on 24 July 2014, IDOTTV became a wholly-owned subsidiary of our Company. Pursuant to the completion of the acquisition of IDOTTV, the issued and paid-up share capital of Sedania Innovator increased to RM14,853,300 comprising 148,533,000 Shares. Prior to the completion of the abovementioned acquisition of IDOTTV by Sedania Innovator, the following transactions were completed by IDOTTV: (i) Disposal of a subsidiary As part of a restructuring exercise, IDOTTV had on 21 July 2014, entered into a sale and purchase agreement with SCSB for the disposal of a subsidiary, Mobtivate for a total cash consideration of RM232,770. The principal activities of Mobtivate are information systems and technologies consultant. The disposal consideration was arrived at on a willing buyer willing seller basis, and is for the settlement of amount owing from Mobtivate to IDOTTV of RM139, 181, with the remaining RM93,589 being the consideration for disposal of Mobtivate, after taking into consideration the cost of investment for IDOTTV of RM27,500 as at 31 December 2013. The disposal was undertaken to streamline the operations of our Group’s principle activities to focus on the core business of the Sedania Innovator Group set out in Section 6.1 of this Prospectus.
5. INFORMATION ON OUR GROUP (cont’d) (ii) Bonus issue On 21 July 2014, IDOTTV undertook a bonus issue of 12,000,000 ordinary shares of RM1.00 each to the shareholders of IDOTTV through the capitalisation of RM12,000,000 from its retained earnings on the basis of six (6) new IDOTTV shares for everyone (1) existing IDOTTV share held. The bonus issue resulted in an increase of the issued and paid-up share capital of IDOTTV from RM2,000,000 comprising 2,000,000 ordinary shares of RM1.00 each to RM14,000,000 comprising 14,000,000 ordinary shares of RM1.00 each. 5.6 LISTING SCHEME (i) IPO In conjunction with our Listing, we will issue 51,467,000 Public Issue Shares at the IPO Price, representing approximately 25.73% of our enlarged issued and paid-up share capital in the manner set out below:
Shares available for application by the Public 9,000,000 Shares available for application by our Directors and eligible 1,000,000 employees Shares by way of private placement to selected investors 41,467,000 Total size of our Public Issue 51,467,000
No offer for sale will be undertaken as part of the IPO. (ii) Listing and quotation on ACE Market Pursuant to the IPO, our Company has made an application to Bursa Securities for the listing of and quotation for our entire enlarged issued and paid up share capital comprising 200,000,000 Shares on the Ace Market of Bursa Securities. [THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
6. BUSINESS OVERVIEW 6.1 BUSINESS OVERVIEW 6.1.1 Business model We are an investment holding company and our Group is engaged in the business pertaining to or connected with telecommunications and IT, which includes multimedia products and all other related activities. IDOTTV, our subsidiary is a platform provider and service enabler specialising in providing ancillary services to the mobile subscribers in Malaysia and Bangladesh. Our business, i.e. aggregators (platform and services enablers), can be classified under the umbrella of mobile content services and solutions market which includes six (6) broad categories of services, namely mobile phone personalisation, infotainment, information, banking and financial services; communication and other services. Presently, our Group participates in two (2) of these categories, namely communication and other services as shown below: Riogtones (Monophonic, Polyphonic, True Tone)
Graphics Logo, Picture Message, Colour Wallpaper, Animation, Theme)
Java Games Strategy, Puzzle, Action, Racing
Sports News; Gaming Result; Updates; Entertainment News; Feng ShuI Tips; and Advice r’—-·~ Note: I :-Partk:/pat/on bySedan/a Innovator ~ ………… J
(Source: IMR Report) , , \ , World and Financial News; Weather Forecast; Stock Alert; and Prayers Information ,, I , •I
I• II \ ‘,——————-,;” ~~—~~~~~I,, I , I , I , I
‘ ‘ I I I I I I I :
6. BUSINESS OVERVIEW (cont’d) The three (3) main participants within the mobile content services and solutions market can be grouped according to their respective roles, namely the content developers/providers, the aggregators (platform and services enablers) and the MNOs. For illustration, the role of the three (3) participants in the provision of content and services is set out below: COOtent Developersl Providers • Content is passed through mobile mtisaging platfOrm Content ~ng and send to mobile network operatol”S Mable Network Operators •Hobile network operatol”S dlstril:nlte: tm! cootent to mobile UHI”S MobieUsers (Source: IMR Report) Content Generally, content developers/providers are the source of developers/providers content in every business model. The role of content developers/providers can also be performed by MNOs and aggregators (platform and services enablers). Aggregators Aggregators (platform and services enablers) act as the critical (platform and interface between content developers/providers and MNOs by services enablers) providing a platform to the content developers/providers to sell and distribute their content through the mobile network. Hence, aggregators (platform and services enablers) generally have access to Shortcodes, either having registered with the MNOs or connected to other aggregators (platform and services enablers) with Shortcodes. MNOs MNOs primarily provide bandwidth for content distribution to the mobile users. MNOs can also assume the role of aggregators (platform and services enablers) by providing a platform to the content developers/providers to sell content to their network subscribers. (Source: IMR Report) IDOTTV, our subsidiary, is an aggregator (platform and service enabler) specialising in providing ancillary services to mobile subscribers by partnering service providers such as MNOs and utility companies for their infrastructure and gateway. Our ATS platform is integrated into the MNO’s system and utilises the MNO’s infrastructure and gateway to reach subscribers. Our platform serves as a base to support present and future developments of customised products and processes.
6. BUSINESS OVERVIEW (cont’d) The diagram below illustrates the relationship between our Group, the MNO and the subscribers of the MNO’s telecommunication services.
I I I I I I I -C—”-C••” MNOs provide the telecommunications infrastructure and gateway as well as several core services including telephone services, SMS, data services, and USSD amongst others to its subscribers. We integrate our platform onto the MNOs infrastructure to provide mobile subscribers with our ATS Solutions and other support services such as marketing, promotion, product and customer support services. The subscribers are charged for the usage of our services which is then distributed between us, our partners (if any) and the MNO. At present, our ATS Solutions are available in Malaysia on Celcom’s mobile network (Celcom Airtime Transfer and Celcom Airtime Request) and Maxis’s mobile network (Maxis 2 Transfer) networks. Our ATS Solutions are also available in Bangladesh with Robi Axiata, under the product name “Quickshare”. [THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
6. BUSINESS OVERVIEW (cont’d) The two (2) business models employed for the expansion of our operations and growth of our business are set out below: (i) Direct partnership with MNOs
Under this business model, we partner directly with the MNO for the provision of our services to the MNO’s subscribers. The revenue generated from the usage of our ATS platform is shared between the MNO and our Group based on agreed contractual terms and revenue sharing ratio. Currently, we have a direct partnership with Celcom for the provision of our ATS Solutions to Celcom subscriber. Further details of our contracts with Celcom are set out in Section 6.6 of this Prospectus.
(ii) Strategic partnerships
Under this business model, we enter into strategic partnerships with third party companies where we provide our ATS Solutions and technical expertise whilst our partner provides the marketing solutions for the sale of our ATS Solutions. Currently, our partners include Rayyan Global in Malaysia for the provision of our ATS Solutions to Maxis subscribers and SIB in Bangladesh for the provision of our ATS Solutions to Robi Axiata (Bangladesh). The revenue generated is shared between the MNO, our Group and our partners on agreed contractual terms and revenue sharing ratio. Under our strategic agreement with Rayyan Global dated 18 June 2013, IDOTTV is responsible for providing our ATS Solutions and Rayyan Global is responsible to develop and maintain a loyalty platform that allows subscribers to collect points for the usage of the Maxis ATS. Both parties are responsible for the marketing strategies and funding for the ATS Solutions under Maxis. Rayyan Global was formed in the year 2012. The principal business activities include the provision of a multimedia application platform that enables software, application and content owners, service providers, and aggregators to develop, package, and market their software, applications and services to the mobile subscribers. Under our strategic agreement with SIB dated 2 January 2014, IDOTTV is responsible for the provisions of our ATS Solutions under the product name “Quickshare” including all enhancements and system development, whilst SIB is responsible for, amongst others, marketing and promoting the ATS services to Robi Axiata and ensuring timely payment for the services from Robi Axiata. Robi Axiata is a mobile telecom operator in Bangladesh. It is a joint venture company between Axiata Group Berhad of Malaysia and NTT DoCoMo Inc. of Japan. Robi Axiata commenced operations in 1997 as Telekom Malaysia International (Bangladesh) with the brand name “Aktel”. In 2010 the company was rebranded to “Robi” and the company changed its name to Robi Axiata. (Source: Robi Axiata’s website -www.robi.com.bdJ
6. BUSINESS OVERVIEW (cont’d) 6.1.2 Products and services (1) ATS platform Our principle product is our ATS Solutions, which is a mobile sharing solution for the transfer of Airtime Credit from either prepaid or post-paid mobile subscribers to other prepaid subscribers within the same network at any time and place. The diagram below illustrates the key characteristics of our ATS Solutions:
Our ATS Solutions are available for the subscribers of both prepaid and post-paid plans and allows mobile subscribers to share Airtime Credit with other mobile subscribers within the same network by keying in an easy to remember single-digit Shortcode which is then instantly processed by our ATS platform. The entire transaction can be completed in a single step and within ten (10) seconds. This method to reload mobile Airtime Credit is user-friendly and is available anytime and anywhere. Our ATS Solutions are supported by a scalable back-end system that is capable of performing 223 transactions per second. In 2014, the lowest number of chargeable transactions per day was 161,505 and the highest number of chargeable transactions per day was 380,984. The two (2) key services we currently provide under our ATS Solutions are set out below: ATS SolutiOns Description ATS Transfer ATS Request The core of the ATS Solutions, this service allows prepaid and/or post-paid mobile subscribers to transfer Airtime Credit to other prepaid subscribers on the same telecommunications network via SMS. This service enables prepaid mobile subscribers with low or zero credits to request Airtime Credit from other prepaid or post-paid subscribers on the same telecommunications network via SMS.
6. BUSINESS OVERVIEW (cont’d) (i) ATS Transfer Our ATS Transfer solution allows prepaid and/or post-paid mobile subscribers to transfer Airtime Credit to other prepaid users on the same telecommunications network via SMS. Traditionally, MNO’s employ the conventional five (5)-digit Shortcode or USSO technology to transfer Airtime Credit from one subscriber to another. USSO though commonly used in mobile credit transactions, requires more steps and time to complete a transferlrequest transaction whereas our ATS users only need to remember a single digit and the users can currently complete the transfer/request transaction in one (1) step and within ten (10) seconds. Our ATS platform utilises a mechanism that requires users to key-in a single digit (number “1” for Celcom subscribers; number “2” for Maxis subscribers) to initiate the service. All modules under ATS Transfer can be completed in one (1) step. The diagram below illustrates the ATS Transfer process under Celcom, known as Celcom Airtime Transfer: Transferor Recipient
With our ATS Transfer solution, a user can transfer Airtime Credit to another user instantly. As set out in the illustration above, the transferor can transfer any amount to another user by keying in the amount, i.e.<10> and sending to the recipient by adding the single digit, i.e. <1 for Celcom and <2 for Maxis, followed by the recipient’s mobile phone number. Once the transfer is completed, our system will notify the transferor to confirm that the amount has been transferred to the recipient. The recipient will also be notified by SMS that they have received the amount transferred from the transferor. (ii) ATS Request An extension of our ATS Transfer solution, our ATS Request solution enables prepaid mobile subscribers with low or zero credit to request Airtime Credit from other prepaid or post-paid subscribers on the same network. Our ATS Request solution involves users executing only two (2) steps to request and transfer the Airtime Credit from one mobile user to another on the same telecommunication network. 6. BUSINESS OVERVIEW (cont’d) Our ATS Request solution under Celcom, known as Celcom Airtime Request is illustrated below: Requestor Transferor
From: AirtimeShareTo : Code+Number
OXXXXXXXXX has requested RQ10 10. Type Y to proceed and N to reject
With our ATS Request solution, a subscriber can request Airtime Credit from another subscriber within the same network, as follows: Step 1 -Requestor keys in <RQ (Amount» indicating the amount requested and sends to the prepaid or post-paid subscriber for their Airtime Credit by adding the single digit, i.e. <1 for Celcom and <2 for Maxis, followed by the transferor’s mobile phone number. Step 2 -The system will then prompt a confirmation request and donor/transferor is required to reply with <V> to proceed and confirm the request or <N> to reject the request. Once the transferor has replied, the system will notify the transferor and requestor with a confirmation notice. In addition to the ATS Transfer and ATS Request solutions, we also have the expertise to provide solutions for the transfer of Airtime Credit through USSD, interactive voice response and smart applications. However, our ATS Solutions are faster and more user-friendly as compared to the aforementioned mechanisms as it requires fewer steps and can be completed in a shorter time as compared to USSD. (2) SMS sharing platform SMS sharing platform is a mobile service that enables subscribers to request for emergency SMS when they have zero credit and send an automatic emergency alert/notification to other registered users within the same network. It provides users with continuous connectivity to their peers. A new service under Celcom, two (2) components of the SMS sharing platform namely, 80S SMS and SOS Alert was launched with Celcom under the product name, “Credit SOS” on 22 September 2014. SOS SMS will allow users to request for an emergency SMS at zero credit balance by enabling the subscribers to send out five (5) SMSes to other registered users when they have insufficient Airtime Credit. SOS Alert or automatic emergency alert notifies a mobile subscriber about another subscriber having zero credit and suggests ways to connect to them. Both the components encourage call-backs and Airtime reloads which benefit both the MNOs and our Group. 51 6. BUSINESS OVERVIEW (cont’d) 6.1.3 Future products Our Group views the continuous and sustained development of new products and services as core to our continued success in the industry. Under a mobile services plan, a mobile subscriber (either postpaid or prepaid subscriber) are provided with an allocated allowance of voice calls, SMS messages, mobile data and network validity according to the amount paid per month or recharged per period. Our future products and services described below aim to provide mobile subscribers with the ability to share the aforementioned components with other users. The following are some of the services that we are currently developing and which we intend to commercialise in the future. Further details on the expected launch period are set out in Section 6.11.1 of this Prospectus. (i) Voice sharing platform Voice sharing platform is a platform that provides seamless voice call services to subscribers who are unable to make calls due to insufficient Airtime Credit or mobile line barring. In line with the rest of our products, which aim to connect users, the voice sharing platform allows subscribers without Airtime Creditor with barred mobile lines to make outgoing calls. Our voice sharing platform operates by obtaining consent from the call recipient who possesses sufficient Airtime Credit to bear the call charges for the party with insufficient Airtime Credit or barred mobile line. Once the call recipient has consented, both parties are directly connected and the recipient bears the charges for the call. A new service for the Group, this platform is expected to be made available to mobile subscribers in Malaysia through Celcom, by the second (2nd ) half of 2015. Please refer to Section 6.11.1 (ii) of this Prospectus for details on the expected launch period. (ii) Data sharin~ platform Data sharing employs the similar concept as the ATS platform. Developed to assist subscribers connect to their peers and the Internet, it enables subscribers to transfer or share their unused monthly allotted data instead of unused credit to another user via IDOTTV’s single digit transfer and mobile number SMS mechanism. This solution helps subscribers to fully utilise their unused data whilst enabling the immediate sharing of data. A new service for the Group, the data sharing platform is expected to be launched in the first (1 st) quarter of 2016. Please refer to Section 6.11.1(ii) of this Prospectus for details on the expected launch period. (iii) Network sharing platform Network sharing platform is another type of mobile sharing service that enables prepaid mobile users to share their validity period or network access with another prepaid mobile user within the same network. This solution provides prepaid mobile subscribers with the flexibility to extend the validity period of their network access for continued connectivity instantly as well as provides an opportunity for subscribers to monetize their excess validity period for Airtime Credit by selling it to other users who require such access. A new service for the Group, the network sharing platform is expected to be launched in the first (1 st) quarter of 2016. Please refer to Section 6.11.1(ii) of this Prospectus for details on the expected launch period. 6. BUSINESS OVERVIEW (cont’d) (iv) GreenBilling© mobile application GreenBilling© is a mobile application developed to facilitate convenient billing services between service providers such as utility companies, banks etc. and their respective customers. The GreenBilling© mobile application is a new application for the Group, that enables subscribers to view all their electronic bills, balances and transactions together in a single screen whilst a mobile payment function under the application will enable customers to make payment from one (1) account. The application is designed to consolidate all the subscriber’s electronic bills under one (1) application and will operate on two (2) main mobile platforms, the iOS and Android. The diagram below illustrates how the GreenBilling© mobile application operates:
Customers have to first enable electronic billing services with their respective service providers and then install the GreenBilling© mobile application on their smart devices either with the iOS or Android platforms. Upon registration, customers will be able to receive their electronic bills or statements from the service providers in the GreenBilling© mobile application format. GreenBilling© mobile application features a mobile payment function that enables users to receive, store and make bill payment as well as perform other actions upon mUltiple bills simultaneously on their accounts via smart devices. It combines a list of features that allows subscribers to efficiently organise and customise their billing applications such as Add Bill, Bill Statement, Push Notification, Reminder, Share Bill, Payment, Payment History, Total Bill Overview, Bill Archive, Trend Analyser and Budget Calculator, asset out in the table below: Features Add Bill Bill Statement Push Notification Reminder Description 1. Subscribers can add bills onto their bill list by searching for the payee’s name or checking in different categories for available payee bill. 2. Subscribers can assign a label to the bill of the particular account to ease bill management in the future. 3. Subscribers could also snap a photo of a paper bill and upload it to their GreenBilling© mobile application. 1. Bill statement is displayed in a simple, clear and well-organised format. 2. Bill Summary: displays bill date, amount, payment deadline, last payment amount and date. 3. Bill Details: displays the charging details of the statement in an organised and user-friendly interface. 1. Subscribers can enjoy receiving alerts, promotion messages, and tips from GreenBilling© by allowing push notifications in their smart devices. 2. Subscribers can opt to get push notifications for promotion messages and tips from GreenBilling©. 3. Subscribers can get push notifications for termination notice from merchants. 1. Reminder services are integrated with device calendar event for reminder. 2. Subscribers can choose to set the number of day(s) before due date as the reminder date under reminder settings. 3. The set reminder will be automatically removed from the device calendar upon the successful payments of the bills.
6. BUSINESS OVERVIEW (cont’d) Features Share Bill Payment Payment History Total Bill Overview Bill Archive Trend Analyser BUdget calculator Description GreenBilling© allows users to choose and share their bills with others and they can set the sharing settings and manage it or to delete the shared user. Subscribers may choose to pay their bills via online banking portals and/or credit cards. 1. This feature provides tracking of payment transactions as updated by payees. 2. A list of organised payment history will be made available for users. This feature displays the users’ total bill as an overview graph and also filters the overview graph by payees. GreenBilling© organises the previous bills in users’ history folder and users would be able to review their previous bills. The user could refer to the report to know their trend of bill payment and it can help them to budget their expenditure 1. Users can keep track their daily expenses. 2. Users can set their monthly income and also their daily budget. 3. Users can save receipts for each transaction, export the data to Microsoft Excel and back up the data with iCloud (for iOS user only).
Key advantages of GreenBilling© mobile application Utility companies and service providers traditionally send bills to their customers either through postal mail or direct delivery, which may get damaged, misplaced or delivered late in the process. GreenBilling© mobile application is designed to bridge the gap between service providers and subscribers and act as a centralised depository to provide customers with the convenience of receiving all their electronic bills in one (1) screen. The application is also designed to operate as a budgeting tool by storing historical bills and monitor payments to provide users with the ability to organise and monitor their monthly bills. For service providers, the GreenBilling© mobile application will ensure a more assured delivery of monthly bills and eliminate the need to print and mail hard copies to their customers thus providing an opportunity to reduce their carbon foot print. Our GreenBilling© mobile application has received a number of awards and recognitions as set out under Section 5.2 of this Prospectus. The GreenBilling© mobile application will be launched in three (3) phases. The first (1 st) phase was launched in the fourth (4th) quarter of 2014, whilst the second (2nd) and third (3rd) phases will be launched in the fourth (4th) quarter of 2015 and first (1 st) quarter of 2016 respectively. Please refer to Section 6.11.1 of this Prospectus for further information of the expected launch. 6. BUSINESS OVERVIEW (conf’d) 6.1.4 Technology infrastructure The solutions developed by our Group is the core to our operations and crucial to our continued business success. Our edge lies in the development of new solutions and continuous enhancement of existing products. Our solutions are designed and developed inhouse by our R&D team and we employ a series of third party tools,as disclosed below, that are essential to our operations, from the development stages up to integrating our platform with our partner MNO’s infrastructure and delivery of our services to the MNOs’ subscribers. Our ATS platform and accompanying services such as ATS Request and ATS Transfer were developed using a mixture of programming languages which include C++ and PHP. Our database on the other hand, was developed using MySQL and is run on an open-source webserver that is optimised for speed-critical environments. The ATS platform was designed to be scalable and requires minimal customisation when applying new solutions or enhancements. For our GreenBilling© mobile application, the development is separated into the client platform (Le. application that users use) and the server platform. The list of software/programming languages for the development of client platforms is set out below: Client platform Objective-C with lOS SDK JAVA -Android SDK Facebook SDK for Android ViewFlow SDK for Android Version iOS Developer Program License Agreement Android Software Development Kit License Apache License, Version 2.0 Apache License, Version 2.0
The list of software/programming languages used to develop server platforms is set out below: Server platform Application and web servicer Mail server Database server Server-side software Version Linux and Apache Linux and Iredmail Linux and MySQL PHP
6.1.5 Technology utilisation and deployment Presently, our Group has twenty four (24) servers that have been fully deployed and utilised for our ATS solution and SMS sharing platforms at various locations for Celcom Data Centres as set out below: I Number of Servers Kepong 12 Subang 3 Menara Celcom, Kuala Lumpur 4 Kelana Jaya 2 Cyberjaya 3
6. BUSINESS OVERVIEW (cont’d) Twelve (12) units of the servers, which were first upgraded in 2008 and 2009, are installed and configured as the main and the backup servers for the ATS solution platform. Three (3) units of servers, which were acquired in 2009 and 2011, are now deployed as the main server for the SMS sharing platform, whilst another one (1) unit as hardware parts back-up. We also deploy two (2) servers at our office in Kelana Jaya for R&D purposes. In 2014 and 2015, we acquired six (6) new servers for our ATS platform enhancements. However most of the existing servers are more than five (5) years old and may not be able to support the more advance requirements and hardware of our new product and services, such as the GreenBilling© mobile application. Hence, as set out in Section 3.6 of this Prospectus, we have earmarked RM2.0 million of the IPO proceeds for the development expenditure of the GreenBilling© mobile application which includes purchase of new mobile application server, mail server and database management server amounting to RM555,000. The new servers are expected to provide scalability for the expansion of the GreenBilling© mobile application. 6.1.6 Principal market and market share For the Financial Years Under Review, the principal market for our ATS Solutions was Malaysia as it accounted for approximately 94.63%, 99.87%, 99.98% and 79.22% of our Group’s total revenue respectively. As set out under Section 6.1 of this Prospectus, the mobile content and solutions market in Malaysia consists of six (6) broad categories and three (3) groups of participants. There are approximately 400 different participants within these broad categories, including a number of MNOs, aggregators (platform and services enablers) and content developers/providers. Sedania Innovator’s market share among approximately 400 different participants within the broad categories of the mobile content and services market in 2011, 2012, 2013 and 2014 stood at approximately 0.3%. The market share is derived by dividing our Group’s revenue of RM8.7 million, RM9.0 million, RM9.9 million and RM11.4 million for the FYE 2011, FYE 2012, FYE 2013 and FYE 2014 respectively with the respective corresponding market size (revenue) of the mobile content and solutions market in Malaysia of RM2.90 billion in 2011, RM3.25 billion in 2012, RM3.76 billion in 2013 and RM4.18 billion in 2014. (Source: IMR Report) [THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK] I Company No.: 1074350-A I
6. BUSINESS OVERVIEW (cont’d) 6.1.7 Premises As at the LPD, we own the following property:
IDOTTV Unit No. 10B, Level 10, Kelana Parkview Tower, Jalan SS 6/2, 47301 Petaling Jaya, Selangor Darul Ehsan A unit on the 10th floor of a thirteen (13) storey office building as our head office and for our business operations 31 October 1996 5,080 Freehold The office unit is currently charged to Malayan Banking Berhad (1) 920,000
Note: (1) The unit was charged as a security for the term loan facility with Malayan Banking Berhad. As at the LPD, we have leased the following property:
IDOTTV Cyberview Sdn Bhd Unit C-1-01 SME Technopreneur Centre (SME 1) Cyberjaya, 2270 Jalan Usahawan 2 Cyber 6, 63000 Cyberjaya, Selangor Darul Ehsan A unit on the first floor of a five (5) storey office building used solely and exclusively for IDOTTV’s business in mobile contents. 669 1,747.50 Until 28.12.2016
Our Group is not in breach of any law, rules and regulations and in respect of our owned and leased properties and have not experienced any environmental issues which may materially affect our operations and utilisation of our properties as at the LPD. 57 6. BUSINESS OVERVIEW (cont’dj 6.1.8 Seasonality Our operations are not materially affected by any seasonal or cyclical factors other than the general economic environment in which we operate. 6.1.9 Interruption in operations during the past twelve (12) months There have been no material interruptions to our Group’s business or operations in the past twelve (12) months prior to the LPD. 6.1.10 Exceptional factors affecting our business Save for the risk factors highlighted in Chapter 4 of this Prospectus, we do not foresee any exceptional factors which may affect our business. 6.2 OUR COMPETITIVE STRENGTHS AND ADVANTAGES We have a number of competitive advantages and key strengths that provide us with a platform to compete against other business operators and also to facilitate business sustenance and growth. This includes the following: 6.2.1 Innovative solutions and user-friendly products Sedania Innovator Group is a consumer-centric aggregator (platform and service enabler), constantly seeking to innovate new solutions for mobile users. We keep abreast with the industry trends through continuous market research and maintaining constant communication with our MNO and strategic partners, and use this knowledge to better serve our customers. Our Group through sustained R&D efforts identifies niches in the telecommunication industry that can be improved to enhance the overall user experience of mobile subscribers. For example, we identified a niche market in the smart phone industry among subscribers who do not fully utilise their data and thus we conceptualised the data sharing platform. The platform enables subscribers to transfer or share their unused monthly allotted data to another user who has fUlly utilised their monthly allotted data. The products developed by our Group is also characterised by its ease of usage, which provides the Group with an edge over its competitors and other credit transferring services. Our ATS Solutions were developed for the purpose of providing users with a simple solution for the reloading of Airtime Credit compared to the conventional methods, particularly at times where infrastructure to reload Airtime Credit is not readily available. Although there are other forms of mobile Airtime Credit sharing platforms, our Group’s ATS Solutions requires lesser steps and time compared to, for example, the USSD process. Our objective of rendering user-friendly products to our customers is also evident in our new product, the GreenBilling© mobile application that is currently in the final stages of commercialisation. Our GreenBilling© mobile application provides users with a centralised electronic billing depository linked with participating service providers. The application will also feature a mobile payment function that enables customers via smart devices to receive, store and make payment simultaneously for multiple bills on their accounts. 6. BUSINESS OVERVIEW (cont’d) 6.2.2 Sustained R&D efforts The future of our Group hinges on our ability to continuously create new solutions for mobile subscribers and improve the quality of existing products. The Group’s R&D initiatives have resulted in the development of our key product, namely ATS Solutions. Our R&D team constantly seeks to enhance our existing products while developing more platform products and services such as SMS sharing platform, voice sharing platform, data sharing platform and network sharing platform that are aimed at the increasing number of smartphone users. Our future products and services are thoroughly reviewed and tested by our R&D team to ensure viability and readiness prior to deployment. 6.2.3 Experienced management team Our Group’s past success and future growth have been and will continue to be influenced by the leadership of a number of key personnel within the Group. Sedania Innovator Group is led by our founder and Managing Director, Datuk Noor Azrin bin Mohd Noor, who has played a pivotal role in the growth and development of our Group since our inception in 2004. Under his leadership, our Group constantly strives to provide improved technological innovations that simplify conventional mobile sharing solutions. He is supported by a team of key management personnel who have been a part of the team since incorporation. Datuk Noor Azrin bin Mohd Noor together with our Executive Director, Noor Syafiroz; our CEO, Azti Dian Fitriyanti binti Azmi; our CFO, Rizalzin Hashim bin Mohammed have made contributions to the growth of our Group with their management, finance, technical and business knOWledge and experience. The Company has also appointed Dr. Hamidun bin Ja’afar as the Deputy CTO and Acting CTO to oversee four (4) divisions of the R&D team, namely, the Product Development team, Engineering team, Professional Services team and IT & Infrastructure team of IDOTTV. 6.2.4 Established relationships with our partners As a platform and service enabler, it is crucial for our Group to secure and maintain good working relationships with our partners. For our ATS Solutions, our partners include the MNOs that provide their infrastructure and gateways to deploy our ATS Solutions. Since 2004, we have been operating with our MNO partner, Celcom with the development of our first phase ATS platform in the same year. Over the years, Celcom and our Group have continuously collaborated to implement various strategies, particularly for the promotion of our ATS Solutions and to increase product awareness. [THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK] I Company No.: 1074350-A I
6. BUSINESS OVERVIEW (cont’d) 6.3 APPROVALS, MAJOR LICENCES AND PERMITS As at the LPD, we hold the following approvals, licences and permits for our business operations together with the details of the conditions attached and the status of compliance:
IDOTTY I MDeC I MSC Malaysia status I 10.05.2011 I 09.05.2016 I To inform MDeC of any change in the I equity structure or shareholding structure of IDOTTY, or such other changes that may affect the direction or operation of IDOTTY. Compliant IDOTTY I Malaysian Investment Development Authority I Pioneer status I 10.05.2011 I 09.05.2016 I Nil I Compliant IDOTTY I MCMC I Applications Service Provider license I 10.04.2015 I 09.04.2016 I Nil I Compliant
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ICompany No.: 1074350-A I 6. BUSINESS OVERVIEW (cont’d) 6.4 PATENTS, TRADEMARK AND COPYRIGHTS 6.4.1 Patents Our Company has applied for the registration of the following patents with the Intellectual Property Corporation of Malaysia which we use in connection with our business:
A System and Methods Used for Electronic Billing IDOTTV 30.03.2011 PI 2011001419 Malaysia Patent pending 2 A System for Allowing Interaction for a Mobile Device Program, a Server Program and a Bridging Program and a Method for Generating the Programs. IDOTTV 22.03.2011 PI 2011001287 (product patent) Malaysia Patent pending 3 A System for Allowing Interaction for a Mobile Device Program, a Server Program and a Bridging Program and a Method for Generating the Programs. IDOTTV 22.03.2011 PI 2011001643 (divided out of PI 2011001287) (process patent) Malaysia Patent pending 4 Improved balance transfer and request system and method * IDOTTV 05.11.2008 PI 20084418 Malaysia Patent pending 5 A Telecommunication Airtime Trading System (1) IDOTTV 28.01.2010 PI 2010000455 Malaysia Patent pending
Notes: Includes short code associating to a specific command for carrying out balance transfer or request. (1) The patent application of the Telecommunication Airtime Trading System is in relation to the AS-SIDQ system that was developed and operated by IDOTTV. The AS-SIDQ system is a commodity trading system that utilizes prepaid mobile airtime credit as the traded commodity. Pursuant to the streamlining of the operations to focus on the core business of the Group as set out in Section 12.2 of this Prospectus, the AS-SIDQ system including its entire operations and resources were transferred to SeSB, which was then transferred to SASe in FYE 2011. The patent application for the Telecommunication Airtime Trading System however was pending reinstatement from MylPO and therefore could not be transferred. Upon MyIPO’s acceptance for reinstatement of the patent application for the Telecommunication Airtime Trading System, IDOTTV had on 1 January 2015, entered into a Deed of Assignment and Transfer of Rights with SASe for the assignment of all of IDOTTV’s exclusive rights, title, interests and liabilities in the patent application for the Telecominication Airtime Trading System to SASe in perpetuity for a consideration of RM1.00. 61 ICompany No.: 1074350-A I 6. BUSINESS OVERVIEW (cont’d) 6.4.2 Trademark The following trademarks have been registered/applied for in Malaysia:
36 Insurance; financial affairs; monetary affairs; real estate affairs and all included in class 36 (3) D.ate E:xpiry istered Date 30.03.2011 30.03.2021 computer software, recorded,software (computer-), recorded; all included in class 9.billing
9 Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, (1) signalling, checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments for conducting, SWitching, transforming, accumulating, regulating or controlling electricity; apparatus for recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs; compact discs, DVDs and other digital recording media; mechanisms for coin-operated apparatus; cash registers, calculating machines, data processing equipment, computers; computer software; fire-extinguishing apparatus and all included in class 9
38 Telecommunications (2) tchdf@-sh£:tl”t!’ Notes: (1) The application for the greenbilling trademark has been submitted to MylPO on 12 June 2014 by Datuk Noor Azrin bin Mohd Noor. Datuk Noor Azrin bin Mohd Noor had on 23 April 2015, executed a Deed of Assignment and Transfer of Rights which is a supplemental to the Deed of Assignment and Transfer of Rights dated 30 December 2014, whereby Datuk Noor Azrin bin Mohd Noor as the beneficial owner of the application for the greenbilling trademark, irrevocably assigns all those exclusive rights, title, interests and liabilities in the trademark application of greenbilling, in perpetuity to IDOTTV. The trademark has yet to be registered on the Register of Trade Marks.
(2) The application for the ShareShare trademark has been submitted to MylPO on 25 March 2015, however, the trademark has yet to be registered on the Register of Trade Marks.
(3) The application for the SEDANIA INNOVATOR trademark has been submitted to MylPO on 17 April 2015, however, the trademark has yet to be registered on the Register of Trade Marks. Class 36 is applicable for Sedania Innovator as an investment holding company.
62 6. BUSINESS OVERVIEW (cont’d) 6.4.3 Copyrights The following copyrights have been registered in Malaysia:
1. Airtime Share 1.0(1) Literature IDOTTV 2. GreenBilling© Mobile Application Literature CRYL00000714 26.02.2014 Datuk Noor Azrin bin Mohd Noor(3) 3. Connexme©(2) Literature CRYL00000801 28.03.2014 Datuk Noor Azrin bin Mohd Noor(3)
Notes: (1) The copyright notification was submitted to MylPO on 3 March 2015 pursuant to Section 26A of the Copyright Act 1987. Airtime Share 1.0 includes both Airtime Transfer and Airtime Request.
(2) Connexme© is a proposed product name for our voice sharing platform.
(3) Datuk Noor Azrin Bin Mohd Noar who is the registered and rightful owner of the GreenBilling© and Connexme© copyrights, had on 30 December 2014 entered into a Deed of Assignment and Transfer of Rights with IDOTTV to irrevocably assign all those exclusive rights, title, interests and liabilities in the copyrights of GreenBilling© and Connexme© in perpetuity to IDOTTV for a consideration of RM1.00 respectively. Datuk Noor Azrin Bin Mohd Noor had on 23 April 2015, executed a supplemental Deed of Assignment and Transfer of Rights for the trademark application of greenbilling as set out under Section 6.4.2 of this Prospectus.
[THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK] 6. BUSINESS OVERVIEW (cont’d) 6.5 MARKETING STRATEGY As part of our growth strategy, we focus on various promotional and marketing activities to create product awareness and encourage potential customers to use our ATS Solutions. We believe our success hinges on our ability to tap into the growing market of mobile subscribers in Malaysia as indicated by the IMR. We employ the following marketing strategies to increase awareness ofour Group’s products and services, secure new subscribers as well as retaining current subscribers: (i) Strategic target based marketing As our ATS platform is integrated into the MNO’s system and utilises the MNO’s infrastructure and gateway to reach out to the subscribers, we work closely with our MNO partners to implement our marketing strategies. Presently, as Celcom is our major partner, all our marketing strategies have been implemented in collaboration with Celcom. Our Group jointly provides the funds and strategies for the joint marketing campaign with Celcom to increase awareness of our ATS Solutions and usage of the services through Celcom. Set out in the table below is the list of the joint marketing campaigns for FYE 2011 to FYE 2014:
Catch-a-Flight Cash Mania Love campaign ATS Love CNY campaign campaign Car Mania campaign Transfer and Win ATS Double Reward Road to Brazil campaign campaign ATS Fever campaign Scooter Beat ATS Beat campaign ATS You and Me campaign CAR Revival Kongsi Duit Raya Share Credit& Win Modenas Raya campaign campaign campaign campaign Transfer & Win Weekdays campaign Postpaid campaign ATS Revival campaign campaign Modenas campaign BSN campaign New User campaign ATS Newbies Shake Samsung campaign Year-end campaign ATS REX campaign Year End Bonanza ATS Mega campaign campaign
The campaigns generally last between one (1) month to three (3) months and we offer attractive prizes as incentives for increased usage of our services. For instance, during the “Year End Bonanza” campaign in 2011, Celcom ATS users stood a chance to win RM100, RM500 and RM5,000 Airtime Credit if the subscriber fulfilled the requirements of making four (4), eight (8) and fifteen (15) airtime transactions per day respectively. In another marketing campaign, the “ATS Mega Campaign” in 2012, our users stood a chance to win smartphones, televisions and motorbikes. 6. BUSINESS OVERVIEW (cont’d) (ii) Mass based marketing Since 2011, we have also continuously implemented a series of awareness campaigns through SMS messages, upon reload for Celcom prepaid customers and upon payment to Celcom post-paid customers, to notify subscribers about our ATS services. We had conducted several advertising and promotional activities to reach Celcom customers in Malaysia through mass media vehicles such as television, radio and web advertising. Set out below is an example of our Group’s advertising activities for a recent marketing campaign.
In addition to the abovementioned campaigns, we have together with Celcom, organised several ground events such as setting up booths to create awareness as well as to provide hands-on information on our services to users. [THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK] 6. BUSINESS OVERVIEW (cont’d) 6.6 DEPENDENCY ON CONTRACTS Save as disclosed below, as at the LPD, .our Board is of the opinion that we are not dependent on any other contract that could materially affect our business or profitability. Our Group has been working closely with Celcom for approximately ten (10) years since the launch of our ATS platform through Celcom’s infrastructure in 2004. The key agreements between IDOTTV and Celcom are summarised in the below table: No. 1. 2. 3. 4. 5. Agreements Collaboration Agreement Agreement for System Integration Services Collaboration Agreement Supplemental Agreement Supplemental Agreement Date of Agreement 16.12.2004 30.12.2005 27.02.2009 07.10.2010 07.05.2015 Expiry Date 15.12.2007 16.08.2008 30.06.2011 30.05.2015 31.05.2020 Description IDOTTV to allow Celcom to offer the Celcom Airtime Transfer Services to its customers using the patented platforms, share-a-Ioad and single coded transfer method. IDOTTV to allow Celcom to offer the Celcom Airtime Request Services to its customers using the patented platforms, share-a-Ioad and single coded transfer method. Renewal of both the Collaboration Agreement dated 16 December 2004 and the Agreement for System Integration Services dated 30 December 2005. Celcom and IDOTTV had agreed to extend the duration of the Collaboration Agreement dated 27 February 2009. Celcom and IDOTTV had agreed to extend the duration of the Collaboration Agreement dated 27 February 2009 and the supplemental agreement 7 October 2010.
6. BUSINESS OVERVIEW (cont’d) The salient terms of the abovementioned contracts are set out below: (1) Collaboration Agreement dated 16 December 2004 (“2004 Collaboration Agreement”) between IDOTTV and Celcom for the design, supply, delivery, installation, testing, commissioning and the operation and maintenance of the Celcom Airtime Share Platform by IDOTTV and offering of the Celcom Airtime Share Services by Celcom to the customers whereby Celcom’s subscribers shall use the under prefix 019 and 013. The 2004 Collaboration Agreement shall mainly cover the offering of the Celcom Airtime Share Services by Celcom to the customers and the provision of the Celcom Airtime Share Platform by IDOTTV to Celcom. The collaboration arrangement shall be implemented as follows: (a) Design, supply, delivery, installation, testing, commissioning and the operation and maintenance of the Celcom Airtime Share Platform by IDOTTV in accordance with the Technical Specifications under Appendix B in the 2004 Collaboration Agreement.
(b) Provision of the Celcom Airtime Share services by Celcom to the customers.
(c) Implementation of the Celcom Airtime Share Services to be jointly undertaken by the parties to ensure smooth implementation utilizing their respective resources as hereinafter appearing.
(2) Agreement for System Integration Services 30 December 2005 (“Agreement for System Integration Services”) between IDOTTV and Celcom where Celcom is desirous to offer Celcom Airtime Request services via the Celcom Airtime Share Platform provided by IDOTTV to its Customers (Celcom’s subscribers using prefix under 019 and 013). The 2004 Collaboration Agreement and Agreement for System Integration Services shall cover the provision of System Integration Services by IDOTTV to allow the provision of Celcom Airtime Request services by Celcom to the Customers as shall be mutually agreed in writing by the Parties. This Agreement shall be implemented as follows: (a) Provision of the Celcom Airtime Share Platform by IDOTTV;
(b) Provision of Celcom Airtime Request services by Celcom to Customers; and
(c) Maintenance of the System by IDOTTV.
(3) Collaboration Agreement dated 27 February 2009 (“2009 Collaboration Agreement”) between IDOTTV and Celcom where the parties intend to consolidate the 2004 Collaboration Agreement and Agreement for System Integration Services to continue to provide the Celcom Airtime Share Services and Celcom Airtime Request Services on a non-exclusive basis and Celcom has the right to develop, operate and maintain the platform and provide similar services other than the collaboration of Celcom Airtime Share Services and Celcom Airtime Request Services for the period of the agreement. The Single Coded Transfer Method is exclusive to Celcom during which the agreement is in full force and the Single Coded Transfer Method is exclusive to IDOTTV and that such exclusivity shall survive the termination of this Agreement.
6. BUSINESS OVERVIEW (cont’d) (4) Supplemental Agreement dated 7 October 2010 between Celcom and IDOTTV to extend the duration of the 2009 Collaboration Agreement and to amend the terms of the 2009 Collaboration Agreement in accordance with the terms and conditions contained in the supplemental agreement. The major amendments to the 2009 Collaboration Agreement are as follows: i. To amend Clause 5 of the Agreement and to include Clause 5.3 as follows: IDOTTV shall allocate certain percentage of its gross revenue and shall utilise it for advertising and marketing purposes as it deems fit, provided always that the advertising and marketing activities conform to the Celcom’s marketing and brand guidelines. ii. To amend Clause 8.1 (k) of the 2009 Collaboration Agreement to be read as follows: to ensure that IDOTTV develops, adept and/or design any changes required by Celcom from time to time at no cost to Celcom. However, any modifications on the Celcom Airtime Share Platform, Celcom Airtime Share Services and Celcom Airtime Share Services software whatsoever shall not be made without any prior written consent from Celcom. We had on 22 September 2011 and 18 April 2013 entered into supplemental agreements with Celcom to enable postpaid to prepaid Celcom Airtime Request services arrangement (‘2011/2013 Supplemental Agreements”). However, the revenue contribution from this segment is not significant to the Group. (5) Supplemental Agreement dated 7 May 2015 between Celcom and IDOTTV to extend the duration of the 2009 Collaboration Agreement, 2010 Supplemental Agreement and 2011/2013 Supplemental Agreements until 31 May 2020 (“2015 Supplemental Agreement”). Under the 2015 Supplemental Agreement, IDOTTV shall continue to allocate certain percentage of its gross revenue for advertising and marketing purposes. In addition IDOTTV shall commit to invest in capital expenditure and R&D purposes for Celcom Airtime Share Services, Celcom Airtime Request Services and Celcom Airtime Share Platform throughout the duration of the 2015 Supplemental Agreement. Currently under the 2015 Supplemental Agreement, IDOTTV’s revenue share portion for Celcom Airtime Transfer and Celcom Airtime Request services is 20% of the transaction fee and Celcom Airtime Request services (Postpaid only) is 50% of the transaction fee. 6. BUSINESS OVERVIEW (cont’d) 6.7 MAJOR CUSTOMERS AND MNO PARTNERS Our Group’s revenue is generated based on the number of transactions transacted by the subscribers of our MNO partner on the MNO’s mobile network. Presently, in Malaysia, our ATS Solutions are available on two (2) networks namely Celcom and Maxis; and on Robi Axiata in Bangladesh as disclosed in Section 6.1 of this Prospectus. The table below sets out the contributions from our services provided to Celcom and Robi Axiata subscribers (i.e. those individually contributing 10.0% or more of our Group’s total revenue for FYE 2011 to FYE 2014):
Although our contract is with our MNO partner for Celcom and our strategic partner for Robi Axiata, our revenue is generated from the subscribers of Celcom and Robi Axiata through the usage of our ATS Solutions. Hence, we are not dependent on any major end customer for our products and services. 6.8 MAJOR SUPPLIERS Our Group’s major supplier (i.e. those individually contributing 10.0% or more of our Group’s total other operating expenses for FYE 2011 to FYE 2014) is set out in the table below:
Pacific Mark 4 years Business 1.915 43.96 Group development million Corporation consultancy Dell Sales Malaysia Sdn Bhd 3 years Office equipment 112,269 13.49 Cll Systems Sdn Bhd 2 years SMS/IT Equipment 307,544 13.20
In FYE 2011, our transaction with Pacific Mark Group Corporation was in relation to business development consultancy for the expansion of our ATS Solutions services in Malaysia. During the FYE 2012, our purchases from Dell Sales Malaysia Sdn Bhd amounting to RM 112,269 was for the purchase of staff computers. During the FYE 2014, our purchases from Cll Systems Sdn Bhd amounting to RM307,544 was for the purchase of application servers for ATS enhancement. Notwithstanding the above, we are not dependent on any single supplier as there are a number of similar suppliers and/or distributors in Malaysia from whom we can source our supplies. 6. BUSINESS OVERVIEW (cont’d) 6.9 QUALITY CONTROL PROCEDURES AND QUALITY MANAGEMENT PROGRAMMES We recognise that quality control and assurance is of paramount importance in the mobile telecommunications industry as it plays a pivotal role in determining the quality of our end product while ensuring our Group’s continuity as a reliable solutions provider. To ensure that the quality of our products is maintained at all times, we have a dedicated quality assurance team headed by our Acting CTO. The quality assurance team was established primarily to achieve the abovementioned objective and encompasses a twopronged approach which is to maintain quality assurance during development and to undertake rigorous testing of the end product to ensure the robustness of product. At the development stage, our development team breaks down each technical stage into concise work iterations, known as “sprints”. Our development team will define the acceptance criteria or test cases at the beginning of each sprint. This sets the direction for the development of the product, in terms of robustness and quality. Functions or modules are tested against these criteria at the end of each sprint and work is not accepted unless it meets the specified criteria. Each sprint normally lasts between two (2) to four (4) weeks. At each sprint, real-world progress is used to plan and schedule releases of modules or functions of a complete program. This allows for programming issues and bugs to be eliminated at each stage and provide for smoother project development before the function or module can be completed. With the implementation of the above mentioned procedures, quality becomes an essential part of the entire development process to ensure continuous validation of shippable products. 6.10 RESEARCH AND DEVELOPMENT We realise that innovation is the key to the future success of our Group particularly in the mobile content services and solutions industry where product life cycles are short and competition is intense. We recognise that R&D plays a key role in keeping a Company abreast with the rapidly evolving technology and consumer trends. Our R&D is focused on the development of innovative products that are user-friendly and the enhancement of our existing products in quick response to market trends and demands, contributing to the Group’s growth in the industry. 6.10.1 Objectives and strategies R&D is critical to the innovation process where ideas and capabilities are transformed into new products, processes and services. Our Group recognises this process and we have thus divided our R&D cycle into three (3) key activities; namely innovation, R&D management and delivery.
6. BUSINESS OVERVIEW (cont’d) Innovation The R&D cycle begins with idea generation for a new product, which is then managed through various tools and methodologies before delivery through a process using the feedback loop. At the innovation stage, the R&D team begins by generating a business model for the new product idea. The process utilises the “Business Model Canvas”, which is a planning template that clearly identifies the key parties/stakeholders, known as building blocks of a new product idea. The building blocks consists of customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure. The R&D team’s talents work on the building blocks that are specific to their expertise. Subsequently the R&D team define their findings on the Business Model Canvas and establish a common language and detailed framework for a particular idea. As set out in Section 6.9 of this Prospectus, the idea is tested rigorously at each stage for quality control to ensure the robustness of the product when handling large amount of transactions. R&D Management Following the innovation stage, the R&D team will proceed with the development of the new product. Under this phase, a “Stage-Gate” system is adopted which splits progress into a series of “Stage(s)” and “Gate(s)”in order to organise and structure the flow of the project. It is a conceptual and operational road-map for moving a new project from idea to launch. Stages are where the development activities occur, while Gates serve as the decision point for each Stage, as set out in the diagram below.
Discovery Development Testing & Launch Post Stage LaunchValidation Review The table below sets out the activities that occur at each Stage: Stage Name Discovery Scoping Build business Development Testing and Validation Launch Description Activities designed to discover opportunities and generation of new product/service ideas. Preliminary market intelligence gathering to assess the availability of similar products in the market and to gather information regarding the commercial viability of the new product/service idea. Assessing the technical, marketing and business feasibility of the new product/service idea. Actual development of the new product/service, together with the identification of marketing launch and test plans for next stage. Validating the entire project which includes the product, customer acceptance and project economics. Commercialisation of the product.
6. BUSINESS OVERVIEW (cont’d) The Gates serve to evaluate the project at each Stage. It determines whether the project should continue based on the deliverables at the end of each Stage. The decisions at each Gate are made by a steering committee, on whether to proceed to the next Stage, hold or terminate the project, depending on various conditions which may range from further development required or changes in target market’s needs. Delivery At the end of the testing and validation stage and upon approval by the steering committee, the product will be released for production and commercialisation. Once launched, our team will continue to monitor the performance of the product to review and measure, amongst others, the real-world performance of the product. The review will serve as a learning and improvement tool for future developments. 6.10.2 R&D Team organisation structure The R&D team presently comprises of a total of twenty-two (22) employees and is divided into four (4) divisions: Product Development team, Engineering team, Professional Services team and IT & Infrastructure team, as set out in the chart below:
Headed by the CTO, the Product Development team is mainly responsible for the R&D of new products, business model generation and project delivery management. The Engineering team is responsible for product design and implementation, whilst the Professional Services team is responsible for amongst others, the integration of our products and services with our client’s system and the IT & Infrastructure team is responsible for hardware support and IT solutions of our operations and office. 6. BUSINESS OVERVIEW (cont’d) The roles and responsibilities of the various positions within the R&D teams are set out in the table below:
Head of Product Development Product Management Researcher Technical Writer Copywriter UI/UX Designer Creative Designer Head of Engineering Software Engineer QA Manager Test Engineer Head of Professional Services Technical Consultant Head of IT & Infrastructure Network Engineer Technical Support Manages all the various team members under product development. Coordinates and manages the deliverables of the project. Researches various aspects of the industry such as telecommunication, banking, and insurance. Writes the technical document. Writes the marketing content for web sites and mobile applications. Researches the user interaction and user experience that is best for our
solutions. Design and interface artist that produces the graphical user interface. Manages Software development team and QA members. Designs and implements software application. Consists of mobile
developers, back-end server developers, web developers and database designers.
Manages the “Quality Assurance” processes. Validates the software produced against technical requirements and test cases.
Manages the team of technical consultants.
(i) Works closely with Business Managers to provide solutions to clients.
(ii) Involved in the integration with client systems. Manages and coordinates IT and technical support members.
(i) Configures and maintains the IT infrastructure.
(ii) Researches and provides hardware solution for the systems.
Provides first level support for all products that has been launched (post production). 6.10.3 Milestones and achievements of our R&D The table below highlights the key milestones and achievements of our R&D team:
2004 Launched ATS Transfer with Celcom under the name Celcom Airtime Transfer 2005 Launched ATS Request with Celcom under the name Celcom Airtime Request 2008 Launched Celcom Airtime Transfer and Celcom Airtime Request (Version3) an enhanced version of the airtime sharing platform with Celcom with upgraded hardware and software/applications to improve traffic and system health 2011 Conceptualised the paperless and eco-friendly GreenBilling© mobile application 2014 1. Conceptualised ATS Platform enhancements 2. Developed phase one (1) of the GreenBilling© mobile application 3. Launched the SMS sharing platform 4. Conceptualised and developed voice sharing platform 5. Conceptualised data sharing platform 6. Conceptualised network sharing platform 2015 Launched the ATS Platform enhancements which include the Enhanced Favourite Number, Enhanced Scheduled Transfer and application based ATS.
6. BUSINESS OVERVIEW (cont’d) 6.10.4 Amount Incurred for R&D activities The R&D expenses of our Group for FYE 2011 to FYE 2014 are set out in the table below:
YE2014 (R,M’OOO) 11,399 R&D expenses 220 209 360 % of R&D 2.5 2.3 3.2 3.2expenses/Revenue The R&D expenses for FYE 2011 to FYE 2014 were in relation to development costs incurred for Celcom Airtime Transfer and Celcom Airtime Request, development servers, hard disks, computers and software costs. The number of technical staff of our Group for FYE 2011 to FYE 2014 and as at the LPD is set out in the table below:
Please refer to Section 8.12.1 of this Prospectus for the breakdown of our employees by category for FYE 2011 to FYE 2014. 6.11 FUTURE PLANS, STRATEGIES AND PROSPECTS 6.11.1 Future plans and business strategies Moving forward, the Group plans to strengthen our current position in the market by implementing the following business strategies: (i) Enhancement and marketing of our ATS Solutions We are currently in the process of developing a number of new features to add to ATS’s marketability and further enhance our current ATS Solutions as set out below: (a) Enhanced Favourite Number The enhanced favourite number allows users to transfer Airtime Credit with ease by assigning a nickname to the recipient, thereby further shortening the number of key entries by the transferor. Thus, users will be able to complete a transfer of Airtime Credit with more speed and accuracy. The enhanced favourite number feature was launched in February 2015 via Celcom. We intend to invest in the marketing and promotion of the enhanced favourite number feature to our current subscribers at Celcom via similar marketing strategies as set out in Section 6.5 of this Prospectus. We also intend to introduce the feature to our other MNO partners in Malaysia and Bangladesh. 6. BUSINESS OVERVIEW (cont’d) (b) Enhanced Schedule Transfer The scheduled transfer feature is intended for users who make transfers at regular or scheduled periods. With this feature, subscribers will have the option to schedule daily, weekly or monthly transfers and thus, ensure that they do not miss a planned transfer. This enhancement is designed to provide transferors with the convenience of carrying out a transaction according to their preferred period, whilst enabling recipients to receive reload Airtime Credit on time and therefore, budget their call spending. The enhanced scheduled transfer feature was launched in February 2015 via Celcom. We intend to invest in the marketing and promotion of the enhanced schedule transfer feature to our current subscribers at Celcom via similar marketing strategies as set out in Section 6.5 of this Prospectus. We also intend to introduce the feature to our other MNO partners in Malaysia and Bangladesh. (c) ATS Sharing Community Portal/ATS Loyalty Points Created to reward ATS users, this feature will allow regular subscribers to accumulate points and will act as a reward system each time the user makes a transfer or request. Thus, the more a subscriber transfers over a defined period, the more loyalty points they can accumulate and the better the benefits or discounts that they are entitled to. This feature is intended to encourage and reward users who regularly use our ATS Solutions. The ATS Loyaltrr Points and ATS Community Portal are expected to be launched in the fourth (4 h) quarter of 2015. (d) Application based ATS The mobile application is to cater for the growing smartphone population at Celcom as well as the market as a whole. The application also serves as a onestop platform for all features of ATS consolidated in one application that is userfriendly. Other than just the basic ATS Transfer and ATS Request services, users will be able to top up or reload their Airtime Credit directly from the mobile application, refer to their airtime usage history, share or link to social networking services and a social community chat feature that is exclusive for ATS platform users will be introduced via the same application. The application based ATS was commercially launched as ShareShare in February 2015 for Android devices. ShareShare for iOS version is expected to be launched in the fourth (4th) quarter of 2015 and further enhancements to ShareShare such as geo-tagging, share or link to social networking services, social community chat and status updates feature, and enabling in-apps purchases are currently under development and are expected to be launched in the first (1 st) quarter of 2016. 6. BUSINESS OVERVIEW (cont’d) (ii) Continuous development of new products and services The continuous enhancement of our Group’s current products as well as the introduction of new products to the market remains one of our key plans moving forward. As set out above, we are continuously developing new features to add to our ATS services to provide users with a seamless transaction experience. As discussed in Section 6.1.3, our R&D team is also developing new products for our Group such as GreenBilling© mobile application, voice sharing, data sharing and network sharing platform. With sustained and systematic R&D push, our Group has set out a detailed schedule for our new products to be developed according to their development stages within a fixed timeframe. We had in 2014 and 2015 launched the following phases of the enhancement to our ATS Solutions and GreenBilling© mobile application: Period • Phase 1 of the ATS Platform enhancement that includes the Launched in enhanced favourite number and enhanced schedule transfer with February 2015 Celcom and the launch of application based ATS
• Phase 1 of the GreenBilling© mobile application that includes the Launched in the
4thimplementation of the basic features of GreenBilling© including quarter 2014 walkthrough pages to educate the users on the benefits of the Green Billing app, registration via email and add and view bill functions amongst others. The phase 1 of the GreenBilling© will be implemented in both iOS and Android platforms. The table below sets out the expected launch period of the remaining enhancements to our ATS Solutions, GreenBilling© mobile application and other solutions: I FlItur~ “‘, …u ATS Platform enhancement (i) Phase 2 includes launch of further enhancements for application 3’d and 4th quarter based ATS in iOS version and other enhancements including menu 2015 and setting options 4th(ii) Phase 3 includes launch of the ATS Sharing Community Portal and quarter 2015 ATS Loyalty points (iii) Phase 4 includes launch of, community portal, geo-tagging, share or 1st quarter 2016 link to social networking services, social community chat and status updates features for application based ATS (iv) Phase 5 includes payment gateway integration for in-app purchase 1sl quarter 2016 for application based ATS GreenBilling© mobile application 4th(i) Phase 2 involves enhancement in registration and payment features quarter 2015 to include login through social media, Payment, Payment History and Bill History features amongst others.
(ii) Phase 3 includes of launch additional features to enhance user 1st quarter 2016 experience by adding budgetary tools, amongst others, as well as
providing service providers an alternative marketing tool to advertise their products or services. Voice sharing platform 2nd half of 2015 Data sharing platform 1st quarter 2016 Network sharing platform 1st quarter 2016
6. BUSINESS OVERVIEW (cont’d) (iii) Expansion of customer base Leveraging on the success of our ATS Services with our Celcom subscribers, we have expanded our services to Maxis. We also intend to expand our services to other MNO partners within Malaysia and overseas. Presently, we are also testing commercial services with a mobile virtual network operator in Malaysia. In addition to Bangladesh we have identified Indonesia and countries in the Indochina region as opportunities to grow our Group’s business. The penetration to new markets will be done through either direct partnerships with the MNOs or third party partnerships with local companies. We also intend to aggressively promote our ATS Solutions in the new markets. Our Group is exploring various channels, such as a direct partnership with other MNOs and/or preferred third party strategic partnerships with local companies, to market our services to users, while meeting the regulations set by the local authorities. Our marketing plans include working with the local marketing agencies as well as the MNO partners in our marketing campaigns as a means to increase the awareness of our products and services. (iv) Expansion of R&D talent We recognise that R&D plays a critical role in the innovation process that is key to our future success. We have developed a number of ideas for the enhancement of our ATS Solutions as well as new products for our Group such as SMS sharing, GreenBilling© mobile application, voice sharing, data sharing and network sharing platform as set out under Section 6.1 of this Prospectus. Thus, in line with our increased R&D efforts to continuously develop our product and services offerings, we intend to expand our R&D talent. As set out in Section 3.6 of this Prospectus, we intend to utilise part of the proceeds raised from our Public Issue to acquire new talent and expand our R&D talent from the existing twenty-two (22) employees to a targeted forty (40) member team within twelve (12) months after Listing. 6.11.2 Prospects of the industry (i) Prospects of leT industry in Malaysia As a whole, the Malaysian ICT industry is expected to perform well in 2015 and throughout the near future, supported by several factors including government initiatives, strong participation from existing ICT players, influx of new ICT set-ups as well as growing demand for ICT products and services in Malaysia. Going forward, the Malaysian ICT industry is expected to continue expanding, sustained by growing industry trends such as cloud computing gaining popUlarity, the use of big data analytics (“BOA”) to improve performance in both public and private sectors, the adoption of Internet of Things (“loT”) as well as increasing demand for cybersecurity. In 2013, revenue from the MSC Malaysia stood at RM34.55 billion. (Source: IMR Report) 6. BUSINESS OVERVIEW (cont’d) (ii) Prospects of Mobile Content and Solutions Market in Malaysia The outlook of the mobile content and solutions market in Malaysia is expected to remain positive, supported by factors including increasing cellular telephone subscription and penetration rate, more physical activities can now be conducted online, as well as mobile content and solutions such as mobile banking, mobile social networking, mobile shopping, mobile advertising and text voting rapidly gaining popularity among consumers. In addition, the closer collaboration between MNOs and mobile content and solution services providers as well as the government’s support towards electronic payment is also expected to help promote the market going forward. However on the flipside, the market might be hampered by issues such as mobile users switching to bandwidth-intensive mobile contents as well as mobile content and solution market players continuously facing downward pressure on profit sharing among other parties in the ICT industry. Overall, the mobile content and solutions market in Malaysia is expected to grow at a steady pace with a CAGR of 8.4 percent for the 2014-2019 period, with the market size (revenue) estimated at RM4.18 billion in 2014 and is expected to reach RM6.29 billion in 2019. (Source: IMR Report) (iii) Prospects of ICT Industry in Bangladesh In line with the country’s economic growth, Bangladesh’s ICT industry shows bright prospects moving forward. The industry is supported by expanding mobile-cellular phone and fixed-broadband subscriptions, industrialisation in the country as well as supporting government initiatives such as exemption of income tax, value added tax and custom duties. In the fiscal year 2012-2013, the size of the Bangladesh ICT industry was estimated at around USD800 million, with the local market contributing the bulk of business activities. (Source: IMR Report) (iv) Prospects of Mobile Content and Solutions Market in Bangladesh The huge young population in Bangladesh signals a vast potential for digital content to be delivered over the Internet or mobile. While the country currently generates a low level of ARPU, the maturing mobile user base is expected to begin accessing more mobile services and content. This coupled with growing personal income and telecommunication providers providing attractive packages to capture market share are expected to further drive the mobile content and solutions market in Bangladesh. As the country gains more mobile users that tap onto the Internet via mobile to access various services, contents and entertainment, the mobile content and solutions markets is also expected to grow alongside that trend. (Source: IMR Report) Based on our future products and business strategy as set out in Sections 6.1.3 and 6.11.1 of this Prospectus respectively, combined with the expected growth in the mobile content and solutions market, our Board is of the view that the prospects of the Group are favourable and we will continue to enjoy positive growth in the foreseeable future.