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TM succeeds in acquiring P1 stake

 | March 26, 2014

menara-tmBy P Prem Kumar

KUALA LUMPUR: Telekom Malaysia Bhd (TM) is believed to have emerged as the successful stake acquirer in broadband Internet service provider Packet One Networks (M) Sdn Bhd (P1).

The current majority stakeholder of P1, Green Packet Bhd, is expected to make an announcement of the winner by end of this week, according to a source familiar with the deal.

“All details of the deal are being finalised. A signing ceremony between Green Packet and TM will be held soon.

“TM is buying a portion of Green Packet’s stake in P1,” said the source.

Attempts made to TM officials to comment on the deal at press time were unsuccessful.

TM is expected to dish out more than RM2 billion for the stake, according to earlier speculations.

The news brings to closure the much-delayed merger and acquisition exercise involving P1 since 2011, with the shortlisted potential buyers besides TM, included DiGi.Com Bhd and YTL Power International Bhd.

P1 — founded in 2002 — is a 57% unit of listed Green Packet and owns valuable wireless spectrum, including 30MHz in the 2.3GHz band (that is used for its WiMAX network), and was one of the eight companies to be awarded last year with 20MHz of the 2.6GHz
spectrum, which would be suitable for longterm evolution (LTE) or 4G-LTE type of services in the future.

TM on the other hand, has some lower bands of spectrum of 450MHz and 850MHz. In March 2007, P1 was one of four companies awarded 2.3GHz spectrum licences by the government to deploy 4G WiMAX services throughout Malaysia, and subsequently, in August 2008, P1 became the first company to launch commercial WiMAX services in Malaysia.

“If the deal happens, TM will gain access to P1’s existing customer base and valuable infrastructure that can be utilised by TM for faster growth in the wireless segment.

“TM will then be a very large player in the business, as they would have a combined deployment of low- and high-frequency bands,” an analyst told The Malaysian Reserve.

P1 has more than 2,000 base stations, boasting a coverage of more than half of the Malaysian population.

As of last valuation in 2010, P1 was valued at RM1.45 billion with a subscriber base of less than 250,000. Its current subscriber base stands at more than 550,000.

P1’s strategic partner is South Korea’s SK Telecom Co Ltd (SKT), which has a 26% stake in P1. SKT is an advanced player in the LTE space, with more than 10 million subscribers, possibly making it the LTE player with the highest subscriber base in Asia.

TM Group CEO Zamzamzairani Mohd Isa said last month that the telco is open for negotiations with any company which complements its business strategy.

“Mobility is important for us especially in the rural areas. We will be open to talk to anyone who is able to complete our portfolio of services, not just restricted to one single company,” he had said.

TM registered a revenue of RM10.63 billion and a normalised net profit of RM1.36 billion for 2013, with this year it will focus on the Internet and data segments to grow its top line.

TM shares closed at a 12- month high of RM6.11 yesterday, a 2.37% jump from RM5.97 recorded on Monday.

About 17.25 million shares exchanged hands yesterday.

This content provided by FMT content provider The Malaysian Reserve


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