KUALA LUMPUR: Green Packet Bhd, provider of the country’s widest WiMAX network, has strengthened its foothold in the European states by securing three separate deals to supply modems to Georgia, Ukraine and Armenia.

In a statement on Dec 3, the company said it would sell its outdoor modems to Georgia’s Maximali and indoor modems to Ukraine’s Intellecom. iCON Communications from Armenia would acquire indoor and USB modems. However, Green Packet did not disclose the value of the contracts.

“According to the Broadband Forum 2Q report, broadband growth in Eastern Europe was reported at 6% quarterly and 29% yearly, representing a twofold growth compared with the world and Green Packet foresees tremendous opportunities for the growth of WiMAX networks in the region,” its senior general manager Kelvin Lee said.

iCON’s chief commercial officer Raffi Kassarjian said Green Packet’s plug-and-play modems allowed its subscribers to get connected instantly with less end-user education.

Maximali chief executive officer Teimuraz Gogoberidze noted the quality of Green Packet’s modems as the main reason for its agreement with the company.

“Winter is coming, so we needed modems that could withstand sub-zero conditions. In fact, the outdoor modems we use must be robust and built to withstand extreme weather conditions, which Green Packet’s modems could do,” he said.

According to Green Packet’s website, the company currently has one client in Europe, namely Hungary’s MVM Power Trading Ltd. It has also established businesses in Asia and North America, and has one client in South America, which is Bolivia’s NuevaTel PCS de Bolivia SA.

On the domestic front, Green Packet’s WiMAX service, provided by its unit Packet One Networks (Malaysia) Sdn Bhd, currently covers 25% of Peninsular Malaysia, and it plans to increase its coverage nationwide to 65% in the next year to 18 months.

Just just two days ago Green Packet had bagged a RM41.5 million contract from the government to provide broadband to underserved areas in Malaysia.

In October, Green Packet announced that its unit P1 had entered into an agreement to take over the FBO licence and assignment of WBA spectrum rights to P1 for RM6.92 million cash from Singapore’s Pacnet Internet Corp (S) Pte Ltd. With that, Green Packet will be able to tap on broadband market in the island republic.

To reach out to more subscribers, the company would begin rolling out its services simultaneously in Sabah and Sarawak in the first quarter of next year.

However, Green Packet has yet to prove itself earnings wise. The company suffered widening losses and had reported a RM31.85 million net loss in the third quarter ended Sept 30, 2009, against a net loss of RM10.29 million a year earlier.

But its revenue had surged almost 250% year-on-year to RM63.04 million.

It said the losses were due to continued heavy promotional activities and subscriber acquisition costs, in addition to higher amortisation and depreciation costs for the further growth of its business.

It needs to spend a total of RM655 million in capital expenditure to increase its nationwide broadband coverage to 45% in the next nine months and to 65% in the next 18 months.

In a note, Standard and Poor’s Equity Research said although it saw strong potential of wireless broadband services amid the country’s low broadband penetration, Green Packet’s aggressive expansion plans were expected to weigh heavily on its liquidity position.

“Nevertheless, we understand that it is gaining market share from Telekom Malaysia Bhd’s Streamyx, with 110,000 paying broadband users to date versus 60,000 as at end-June 2009. Management is confident in achieving the targeted 200,000 users by end-2009, and expects to break even at Ebitda (earnings before interest, taxes, depreciation and amortisation) level by 1Q10 when it surpasses the 250,000 mark,” it said.