KUALA LUMPUR: REDtone International Bhd, which has launched its first Internet of Things (IoT) application for smart city called CitiAct, expects IoT services to contribute at least 5% of its profit in three years. Managing director Datuk Wei Chuan Beng said there is good growth potential for IoT services with the growing usage of IoT devices such as smartphones among Malaysians. IoT is the network of physical objects or "things" embedded with electronics, software, sensors, and connectivity to enable objects to exchange data with the manufacturer, operator and other connected devices. IoT offerings are part of REDtone's latest managed value-added services that will provide new revenue streams for the company in the financial year ending May 31, 2016 (FY16). REDtone's managed value-added services include data centre services, IoT solutions, cloud services and applications and healthcare solutions to enterprises, government and healthcare industry. "IoT is going to be a business that will last the next 10 years and this is just the beginning. With the launch of CitiAct and CitiSense, and subsequently additional modules, we believe in the next three years, it will be a significant contribution to Redtone's revenue," Wei told a media briefing after launching the app here yesterday. He said the integrated telecommunications solutions provider has been preparing for IoT for the last two years and has plans to introduce more IoT applications in the future. It also intends to extend the application to neighbouring countries in Asean within a year, and that this is an area of business where it owns the full intellectual property as it has developed the entire platform, application and services. "The neighbouring Asean countries will be our immediate target. We seek the opportunity through trade shows and exhibitions and from there, I believe we can draw more and more leads from the regional market," said Wei. Besides managed value-added services, the other businesses of REDtone are telecommunications services, managed telecommunications network services and mobile services. Wei said all four businesses will see growth in FY16, although the two biggest contributors are still telecommunications services and managed telecommunications network services. "We're optimistic that managed value-added services will be the real future of REDtone's growth," he said. ACE Market-listed REDtone targets to have 100,000 users for CitiAct next month. CitiAct is a citizen engagement application targeted at citizens and local councils. It uses the smartphone and empowers citizens to report and track issues sent to local councils while enabling local councils to respond more effectively. There are 151 local councils in Malaysia. "It is affordable... at a small marginal cost equivalent to a few enforcement officers for them (local councils) to subscribe on a monthly basis," said Wei. CitiAct is developed by REDtone's subsidiary REDtone IOT Sdn Bhd, which has also created an IoT platform called CitiSense that connects and manages the sensor data in the Cloud.