If TM does merge with P1, then it will gain a head start on its 4G strategy by being able to utilise P1’s spectrum.
PETALING JAYA: Packet One Networks (M) Sdn Bhd (P1) is inching closer to a merger and acquisition (M&A) deal with legal documents having been drafted by advisers, banking sources said.
However, it isn’t clear who the exact party the M&A is with, but indications are that it is either DiGi.Com Bhd or Telekom Malaysia Bhd (TM), both of whom have been widely speculated in the past to be eyeing an M&A with P1.
It had been earlier reported that DiGi.Com was the front-runner, but industry sources pointed out that TM was just an equally strong contender for a controlling stake in P1.
P1 is a 57% unit of listed Green Packet Bhd and owns valuable wireless spectrum.
Sources also said that the TM-P1 deal was being speculated among business partners of TM, such as their distributors.
Industry observers noted that a “TM-P1” merged entity could become a significant player, considering the “spectrum power” and synergies this combined force would have.
TM has 10 megahertz (MHz) of telecommunications spectrum in the 850MHz band and another 8.5MHz of the 450MHz band, while P1 has 30MHz in the 2.3 gigahertz or GHz band and 20MHz of the 2.6GHz band.
“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,” said one industry player.
TM has also communicated in the past its firm strategy of venturing into the data-centric 4G market, reportedly saying that it has plans to use its 850MHz spectrum as its long-term evolution (LTE) frequency band and aims to have 100,000 users on its wireless LTE network by 2014, and more than one million by 2017. LTE relates to the technology infrastructure to deliver 4G type of services in the future.
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