In our increasingly connected and fast-paced world, we all seek faster mobile networks to enhance our experiences and connectivity, whether it’s playing mobile games or streaming video content on the go. Fortunately, with the availability of fifth-generation (5G) wireless technology, which comes with a completely new infrastructure, from the spectrum frequencies to the radio and core network, we can revel in speeds that are 100 times faster than the present 4G LTE network.
One company that is facilitating this transition to 5G for telecom operators like China Mobile is Comba Telecom Systems Holdings. First established in 1997, Comba Telecom (SGX Code: STC) has a primary listing on the Hang Seng Stock Exchange (HKSE) and a secondary listing on the Singapore Exchange (SGX) Mainboard.
While Comba Telecom operates in over 100 countries and regions worldwide, its primary revenue comes from its operations in China. It has four main business segments that target the needs of telecom operators to expand their infrastructure network from extensive to in-depth coverage in both 4G and 5G.
With the global shift from 4G to 5G causing demand for network solutions like those offered by Comba Telecom to grow, here are 5 things to know about its business.
Describe Comba Telecom’s main business segments and revenue drivers.
Comba Telecom’s business is organised into four main segments of which three make up close to 92% of total revenue. These three segments are:
Base Station Antenna and Subsystems – The Group mainly supplies new 700MHz/900MHz low frequency band and 1.8/2.1/2.6/3.5GHz intermediate frequency band GHz antenna products. In response to the demand for 4G/5G integrated antenna for overseas 5G network construction, the Group also developed the industry-leading multi-antenna common-calibre wave transmission technology platform and Access Point (AP) antenna in strategic cooperation with the main equipment vendors. In FY2022, by securing major centralised procurement bidding projects for 5G antenna products from leading telecom operators in China, the segment achieved record high revenue of HK$3,039.0 million, an increment of 25.8% year-on-year.
Network Systems – The Group has a wide range of network products. This includes small cells products with deep coverage capacities covering scenario-based high-power base sites, sharing of indoor coverage Distributed Antenna System (DAS) and Open Radio Access Network (RAN) products of mobile telecommunication, and 5G fundamental network platform solutions for 5G vertical industry applications. The Group also offers ScanViS computer vision Artificial Intelligence (AI) solutions to support smart city development together with Automated Guided Vehicles (AGV) intelligent vehicles and solutions to support factory intelligent chemical applications.
Services – The Group provides mobile communication network product development, planning and design, engineering construction, project management, network maintenance, optimisation and other comprehensive and professional full-cycle services for operators. These services are aimed to help operators reduce cost of network construction and maintenance, and thus improve overall service efficiency.
To what extent is the Group capitalising on new norms and trends that could be game-changers for it in the future?
The ‘green antenna solution’ achieves a significant reduction of 13,000 to 20,000 tonnes in carbon emissions, effectively supporting carbon reduction goals and helping operators reduce operating expenses.
Comba Telecom’s extensive product range aligns with the national planning requirements of the PRC, including the Outline of the 14th Five-Year Plan and the implementation of the rural revitalization strategy.
With independent R&D capabilities and extensive experience in software and hardware, Comba Telecom possesses all key and core technologies for mobile telecommunications, meeting universal specifications for 4G/5G network access. The company has successfully conducted commercial trials of 5G small cell products across multiple provinces in Mainland China, earning recognition for their rapid and efficient 5G network construction plans.
What is Comba Telecom doing to fulfil its sustainability commitments?
Comba Telecom’s new generation of green antenna solutions aim to create value for customers, corporates and society.
Customer value: The new generation antenna solutions allow operators to save around 23 to 34 million kWh of electricity per annum for every 10k base stations. This contributed to realising carbon emission reduction goals and helped operators reduce operating expenses. It also reduces around 10% to 20% of station sites, increases 1-2dB in-depth/sea coverage level, and lowers 30% of antenna failure nodes.
Corporate Value: The Group anticipates a 20% increase in straight-through rates and 30% reduction in return rates with improvement in quality and efficiency.
Social Value: Carbon emission reduction is expected to be between 13k to 20k tonnes per year. The Group also anticipates approximately 50% reduction in pollution and reduction of solder emissions by approximately 35%. The new generation antenna solutions also has a 100% recycling rate.
The Group was awarded the 2022 EcoVadis Sustainability Silver Medal as recognition for the series of innovative solutions including the development of smart, efficient and green 5G networks.
There has been a rise in trade wars and geopolitical tensions in recent times, leading to more countries favouring protectionist policies. What are some of the Group’s challenges with international trade and how is it overcoming them?
The global trend of trade wars and geopolitical tensions, as well as rising competition in information and telecommunication industry present both challenges and opportunities to the industry and the Group. One of the potential downsides in the industry would be a fall in demand for imported goods.
However, the Group is confident of riding through the challenges by deepening the relationship with its existing key telecom operators’ customers and increase market shares, diversifying its business through international market expansion, as well as providing cost-efficient, good quality, as well as low-carbon, eco-friendly and energy-saving products to meet the needs of the telecom operators.
The Group will continue to implement effective operation and management policies as well as cost control measures to forge ahead in an effort to create value for the shareholders and customers as a whole.
Why should investors take a closer look at Comba Telecom?
Beside a profit turnaround in FY2022, the Group is also confident in its growth in the coming year. It believes that wireless communications will continue to be the core and necessity of businesses and society.
Comba Telecom’s products, including base station antennas, network system and services has high market share and extensive footprint in China and international markets.
As businesses place higher emphasis on Environment, Sustainability and Governance (ESG), Comba Telecom’s pursuits of sustainability have lowered operators’ costs and created more opportunities for them in private networks. With the evolution and progress of 5G+ verticals, Comba Telecom believes that it is well-positioned to leverage this trend and maximise its growth.
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 27 June 2023 and have been republished with permission. You can read more on Comba Telecom on the SGX website.