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Tuesday, September 10, 2013

DiGi, Green Packet in talks on 4G tie-up? (BT)

DiGi.Com Bhd, the country's smallest mobile phone operator, is courting Green Packet Bhd for a potential tie-up that will allow the telco to widen its spectrum base and roll out 4G services by as early as next year.

Last month, DiGi, which is 49 per cent owned by Norway's Telenor ASA, tipped the market that it was on the prowl to acquire a 900 MHz spectrum.

Talk on the possibility of DiGi entering into RM1 billion deal to acquire Packet One Networks Sdn Bhd, which is 61 per cent owned by Green Packet, has excited the market.

Green Packet shares were snapped up yesterday on anticipation of the sale.

Packet One, the country's first WiMAX (Worldwide Interoperability for Microwave Access) service provider, could inject between RM700 million and RM1 billion into the parent.

Early this year, Green Packet was open on the possibility of a sale, as the company doubled its efforts to cut cost, which led to more than 90 staff being laid off in March.

Business Times understands that talks between DiGi and Green Packet involve two possibilities - an outright sale of Packet One or a platform lease sharing deal.
"DiGi favours a platform-sharing arrangement as the RM700 million price tag for Packet One does not make sense, as Green Packet's market capitalisation is less than half of that," said a source.

Apart from Maxis Bhd and Celcom Axiata Bhd, four others that have spectrum of that magnitude are Asiaspace Sdn Bhd, Packet One, REDtone and YTL Communications.

DiGi's lack of fire power in terms of spectrum could see the company fall behind in the race to offer the best 4G services in Malaysia.

As it is, Maxis and Celcom have teamed up with the likes of U Mobile, REDtone and Altel Communications Bhd in platform-sharing deals to roll out 4G services.

4G refers to mobile broadband services using next generation technologies such as LTE (Long Term Evolution) and WiMAX.

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