Pacific Internet (PCNTF) article from Singapore:
At PacNet, keeping customers happy is key to success
Service benchmarks in office show why it's voted best ISP
By Catherine Ong
[SINGAPORE]
It has been a good day at Pacific Internet Ltd. The red lights on the electronic board showed it all. The one flashing CW came on momentarily before it went off again. Against the SL light, the figure was 92.
PacNet chairman Chan Wing Leong was beaming; he liked what he saw. The electronic board on the wall of the company's second floor office at The Rutherford, a modern, high-tech building in the Science Park, is a second-by-second, uncompromising measurement of service standard.
Mr Chan: 'We are the first Internet company out of Asia to be listed.
CW, as Mr Chan explained, means Customer Waiting and as he spoke, the customer who called Singapore's fastest-growing Internet Service Provider's office was being served within a minute. The SL light refers to Service Level and last Thursday, 92 per cent of customer calls were serviced within the benchmark of one minute.
Keeping the customer happy is a key to PacNet's success and a major reason why it has been voted the best ISP in Singapore by readers of ComputerWorld two years running, and why it has in a little over three years, snatched 40 per cent of the market share from the incumbent, SingNet.
"We're not built on hype," Mr Chan quipped as the subject moved on to its sizzling Nasdaq performance last week. Launched at US$17 a share, it rocketted to US$88 at the open before closing at US$48, up 182 per cent from its public offer price.
Its stunning market debut underscored the "concept play" on the future of the Internet business, explained Mr Chan. "We are the first Internet company out of Asia to be listed. To investors, our story represented things to come in the region."
The fast-talking, animated PacNet chairman believes that the offer price of US$17 represented good value to the company, even though the trading debut showed that it could perhaps have gotten away with a higher pricing. He pointed out that the counter has plummetted after the first day of trading, and is now hovering closer to the offer price.
"I'm thankful that the market valuation is good. Before we launched the issue, we compared ourselves with other ISPs in the US. There are seven to eight ISPs in the US; we were pitching ourselves (price-wise) somewhere in the middle, and lo and behold, we got up to the top."
Since PacNet -- a brainchild of Economic Development Board chairman Philip Yeo who also advocated its Nasdaq listing -- broke SingNet's monopoly in 1995, its revenue has jumped more than 25 times from $2.2 million to at least $55 million in 1998 (it reported total revenue of $33.1 million for the first six months of last year).
Net profit for the first half of last year was $5.8 million against a loss of $3.8 million in the same period of 1997.
"Our customer base has been growing like this," he said, sweeping his right hand upwards. "When we blew the market wide open in Singapore for Internet, we knew this was something customers wanted, that it could be a mass market product at mass market prices.
"We grew right through the recession. In 1997, when the GDPs of every country in the region went like this, we went like that. It's a demand waiting to happen."
PacNet, as the only Asian ISP to be in more than one country, was a trailblazer in the region.
The subsidiary of listed SembCorp Industries propels itself ahead on youthful exuberance. At 42, Mr Chan and PacNet chief executive Nicholas Lee, who is of the same age, extend adult supervision to a staff of 300, mostly in their 20s, some looking like they should still be in school.
Their office at Science Park is a hive of activity morning to night, the floors cluttered with a dazzling array of promotional gifts, from soft drinks to T-shirts to cuddley toys.
PacNet projects itself as a cool ISP, the gateway to the World Wide Web for savvy surfers. At the same time, it strives to offer subscribers as much bandwidth as a little copper wire can possibly carry at competitive prices.
PacNet has a total of 203,490 dial-up subscribers and 593 leased-line subscribers at the end of last year. Singapore accounts for more than 90 per cent of that but this proportion will decline as it expands regionally.
Currently, it owns a 50.1 per cent stake in Hong Kong Supernet, a distant number two to the Hongkong Telecom's ISPs, and 40 per cent of Philippine's Primeworld Digital Systems, which runs Pacific Internet Philippines.
Mr Chan said the bulk of the company's US$36 million (S$60.9 million) proceeds from its Nasdaq listing will be used to finance regional expansion, starting with Australia and India this year.
In October, it signed a non-binding MOU with Thakral Brothers to set up a 49:51 ISP joint-venture in India. Other markets being looked at include Thailand, South Korea and China.
Mr Chan said PacNet wants to be the leading provider of Internet access and Internet service in the Asia-Pacific region. It envisages an exciting roll-out of value-added services, including voice over IP (Internet Protocol), fax over IP and electronic commerce.
Most of all, it wants to replicate the Pacific Internet model -- described as aggressive, multi-channel, lifestyle-oriented, high-quality, and competitive -- which has served it well in Singapore to other parts of the region.
If forecasts by IDC, a US data company which expects the number of Web users in Asia-Pacific to grow from 6.6 million in 1997 to 34.2 million in 2002, or a compound rate of 39 per cent, bear out, PacNet should be well placed for the boom.
But Mr Chan said PacNet's ambition is limited by manpower resources. It is ever on the lookout for good managers to hire for its regional offices. "Believe me, we are not perfect yet, we are going to do more, do better," he added.
No hype there, certainly.
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