SINGAPORE – Listed telco group TeleChoice International has secured a $500 million contract from a fast-growing Malaysian firm that could transform the company.
The three-year supply chain management deal essentially sees TeleChoice becoming the buyer, distributor and sales agent of all mobile devices and wearables for U Mobile, Malaysia’s third-largest telecommunications company.
TeleChoice chief executive Pauline Wong told The Straits Times that the deal could mark the beginnings of a turnaround for the firm and its entry into a supply chain and managed services sector beyond Singapore.
“This deal sets the foundation for our recovery and growth from 2024 and beyond,” she said.
“We have gone through some difficult years since the Covid-19 pandemic hit, but we are now quietly confident that all engines will fire up this year.”
The ST Telemedia-controlled company was set up in 1998 as a distributor of handsets and wearables for StarHub – also an ST Telemedia firm – and listed on the Singapore Exchange in 2004.
Besides retail, e-commerce, distribution and supply chain management services for mobile communication devices, TeleChoice also provides integrated info-communications solutions and network engineering services and supplies specialised telecommunications products.
It had been profitable since 1998, but its fortunes plummeted in the wake of the pandemic and rising costs associated with the rapid transition from 3G to 4G and 5G in recent years.
It posted three consecutive years of losses from 2020, prompting the SGX to place it on its watch list in 2023.
But Ms Wong, who has 30 years of experience in the telecoms industry and assumed the CEO role in October 2023, sees the firm regaining its past glory.
“TeleChoice is built on very strong foundations and this year signifies a strategic reset for us.
“We will establish a baseline of strong operating momentum and fire all three growth engines for sustainable growth. TeleChoice’s value proposition to customers is our ability to address pain points in today’s fast-paced landscape. We must be able to anticipate and address the pace and magnitude of change,” she said.
She described the U Mobile contract as a linchpin in the company’s broader turnaround journey, adding that the mega deal comes even as TeleChoice was serving an array of strong clients.
It operates the Planet Telecoms retail chain and is also the exclusive StarHub Platinum Shops managed services partner. It manages concept experience stores for major mobile device manufacturers, such as Samsung and Oppo, and serves as smart-device maker Honor’s managed services partner and full-service distributor in Singapore.
Ms Wong said she was confident TeleChoice was on a strong wicket to clinch several more of the lucrative contracts for which it has been bidding.
Despite being loss-making, the company continues to hold a strong balance sheet with total assets of $105.2 million, total liabilities of $66.1 million and a cash position of $22.7 million for the first half of the 2023 financial year.
An avid golfer, Ms Wong likened the changing fortunes of her company to being granted a “mulligan” – essentially a “free” second ball after hitting a poor first shot.
“We have teed off nicely and the ball is now on the fairway. We just need to land it on the green and get that par,” she quipped.
“2024 is our 20th year since listing, and this will be a transformative year for us. We intend to roar back and start paying dividends.”
Indeed, the company has been paying generous dividends all the way from 2004 to 2021, with a committed payout ratio of at least 30 per cent of annual net profit. In fact, anyone who had invested in TeleChoice shares since its 2004 listing would have collected 30.88 cents in dividends, above its listing price of 29 cents.
While chasing more deals to boost revenues, the company said it is also rationalising its portfolio of products, services and solutions to maximise efficiency and effectiveness.
TeleChoice stock remains suspended.
