Saturday, March 13, 2010

MU deal may boost sentiment for TM’s broadband launch

PETALING JAYA: The five-year agreement between Manchester United (MU) and Telekom Malaysia Bhd (TM) is expected to boost sentiments for the TM’s upcoming maiden launch of high-speed broadband (HSBB) related services.

According to an analyst with AmResearch, besides the right to advertising, the partnership was expected to enhance the image of TM ahead of the HSBB launch on March 24.

“We do not expect much direct financial benefit as a result of this tie-up,” he noted.

An analyst with OSK Research said the partnership deal could have cost TM millions of pounds, but the amount would not have been too strenuous to the telco giant when compared with other similar deals.

“I would not read too much into this deal. MU would probably supply the content for the upcoming launch of TM’s video services (HSBB related services), which would include a sports channel,” he added.

Meanwhile, an analyst with a bank-backed brokerage said it was not immediately clear how this tie-up would benefit TM. “Besides the sponsor space and some complementary synergies, it is difficult to gauge how TM would benefit from this deal.”

The partnership deal to link the two brands in marketing campaigns and promotional activities was announced at Old Trafford on Thursday by TM group chief executive officer Datuk Zamzamzairani Mohd Isa and MU chief executive officer David Gill. The financial commitments, however, were undisclosed.

With the deal, TM becomes MU’s official integrated telecommunications partner in Malaysia with licensing, intellectual property and dealership rights to produce and distribute merchandises bearing the club’s crest and team images. TM’s brand and association with MU will be showcased to 4.2 million fans in Malaysia and more than 330 million fans and football followers worldwide.

This deal would the second tie-up between TM and MU, the first being the Manchester United Asian Tour 2009 sponsorship.

TM, which has spent RM1.8bil in capital expenditure for HSBB, is set to launch its next-generation HSBB retail service on March 24 where it will also be unveiling the new branding for this service as well as its tiered packages and pricing. The HSBB retail packages will comprise triple-play services of voice, video (Internet-Protocol TV and video on demand) as well as high-speed Internet.

AmResearch in a report said demand for TM’s upcoming video services would largely hinge on pricing and contents offered.

“We foresee HSBB having a take-up rate in the region of 20,000 by year-end. This will further expand to 110,000 by the end of 2011. Our main assumption hinges on the RM100/month package – the lowest package on offer,” the report added.

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