Long rumoured to be a merger and acquisition (M&A) target, Packet One Networks (P1) looks ready to finalize a possible deal. The Star reports that necessary legal documents have already been drafted by advisers, with DiGi Telecommunications and Telekom Malaysia (TM) supposedly contenders for the company, which owns valuable 4G spectrum.
Article continues after the jump.
In 2012, the Malaysian government awarded the allocation of 20MHz of 2.6GHz spectrum to P1 to roll out 4G LTE in the country alongside seven other industry players which are Celcom, Maxis, DiGi, U Mobile, REDtone, YTL Communications and Puncak Semangat. The nationwide 4G LTE rollout has been slow since then, with only Celcom, Maxis, U Mobile and Puncak Semangat subsidiary Altel to have rolled out 4G LTE in selected locations in the country. YTL Communications has since announced that it will begin rolling out its own 4G LTE network in Malaysia this year, leaving DiGi the only major telco to not roll out its 4G LTE network for smartphones just yet (although recent events have revealed they are ready to roll out 4G LTE for smartphones).
So what makes P1 an attractive M&A target? Essentially, it’s that slice of 4G LTE spectrum and nothing else. Having more spectrum means faster data services, and that is always good. That’s also why Celcom agreed to a partnership with Altel (the only player awarded double the spectrum allocation) to share network infrastructure, and the same applies to Maxis’ partnership with REDtone. As the only two players to have not made significant announcements about its 4G LTE rollout, this is why speculation has been rife that DiGi is seriously looking into buying out P1 for its 20MHz spectrum.
But what of TM’s rumoured interest in P1? As the Star reports, TM owns a total of 18.5MHz of “low-frequency” spectrum bands, while P1 owns 50MHz of “high-frequency” spectrum bands. “A combination of these low and high-frequency bands makes this a very powerful player, at least spectrum-wise, for building a strong 4G footprint in the country,” an industry player revealed to The Star. And, given that TM has already intimated plans for 4G mobile broadband to roll out as early as February 2014, the acquisition of P1 would be a substantial move towards that vision.
So will P1 be the final piece of the puzzle for an extensive 4G LTE mobile broadband service, or the final push down the straight for DiGi’s eventual 4G LTE rollout? Or, is this just another smoke and mirrors ploy to push the price of Green Packet up for insiders to dump their shares? We’re about to find out soon.
(Source: The Star)