REDtone exits IPTV to focus on voice and data

IPTV is hot in Asia and particularly hot (and competitive) in Malaysia, which is primarily why REDtone (OTC: RTAS) is moving away from IPTV and pushing forward with a transformation from primarily a voice business into data and broadband services.

REDtone used IPTV to promote Chinese-language content in competition with Astro and Telekom Malaysia's HyppTV. It was, the company has said, never a moneymaker and, a company source told The Malaysian Reserve, broadband and data (sans video) is the path the service provider will follow in the next year as it tries to get more from its "cash cow" voice business.

The "loss-making businesses" that are being pushed aside include REDtone Multimedia Sdn Bhd, REDtone Software Sdn Bhd, which does research and development in VoIP customer premises equipment, and REDtone Mobile SDN Bhd, which distributes and sells prepaid discounted call services to retail markets in Malaysia.

REDtone used its fourth quarter financial announcement at the end of July as the official announcement that it would be exiting IPTV after taking losses for the last four years.

According to early statistics, the broadband and data strategy is paying off. REDtone reported a 19.5 percent revenue growth in those services and also signed a deal with TM to provide broadband services.

On the broadband wireless front, REDtone has about 4,500 Wi-Fi hotspots throughout Malaysia and signed a deal to use and share Maxis Broadband's infrastructure as part of a 4G broadband effort to deliver speeds up to 150 Mbps.

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