Following unconfirmed reports earlier this week, which claimed that Telekom Malaysia™ had secured a stake in WiMAX provider Packet One Networks (P1), the telco has confirmed details of the deal. To that end, TM revealed that it has entered into an investment agreement with current owner Green Packet and strategic partner South Korea’s SK Telecom (SKT), to collaborate on developing a next-generation LTE network to offer customers a full-suite of converged communications services. Under the terms of the deal, TM will take a 57% stake in P1, while the agreement will establish a partnership framework for the three parties to share in the ownership and collaborate on the future growth of P1. As part of the investment agreement, TM will initially invest MYR350 million (USD92 million) into P1 via the subscription of new ordinary shares to make it the majority shareholder; Green Packet and SK Telecom will both remain key strategic shareholders upon completion of the transaction. Further, TM will invest up to MYR210 million into Green Packet via newly issued redeemable exchangeable bonds, which may be exchangeable for Green Packet’s stake in P1 in the future. Approval from both local regulatory bodies and Green Packet shareholders’ are required before the deal can move forward, however.
With a press release outlining the core elements of the deal, it has been claimed that the partnership framework will allow each party will contribute its ‘unique strengths’ to P1. With P1 seeking to capitalise on its spectrum assets, existing wireless platform and network footprint of close to 2,000 sites to expedite its entry into the LTE space, TM will ‘anchor the growth and development of P1’s business’. For its part, as the leading operator by subscribers in one of the world’s most advanced LTE markets, SKT is expected to contribute valuable technical and strategic know-how.
Commenting on the partnership, Green Packet’s CEO CC Puan said: ‘We welcome the entry of TM as a strategic shareholder alongside us and SKT … As Malaysia’s ‘broadband champion’, TM will bring significant synergies to our existing business capabilities and SKTs enhanced commitment to the P1 business is not only affirming, but will strongly transition P1 into the LTE era.’ Meanwhile, TM chief executive officer Tan Sri Zamzamzairani Mohd Isa added: ‘We are further expanding our capabilities into the adjacent wireless broadband space, as a natural evolution of our suite of internet and data services, in order to better serve our customers’ needs. The partnership provides an LTE-ready platform for us to more efficiently roll out wireless broadband products and accelerate time-to-market for our customers.’