Tuesday, April 13, 2010

P1 stake sale may raise US$100m

A few parties have approached Packet One, including South Korea's SK Telecom, and talks are still in the early stages, sources say

Wireless broadband service provider Packet One Networks (Malaysia) Sdn Bhd (P1), a unit of Green Packet Bhd (
0082), may raise about US$100 million (RM319 million) by selling a fifth of the company to a strategic investor.

It is believed that there are a few interested parties which have approached P1, including foreign telecommunications companies like South Korea's SK Telecom. "So far, a few parties have approached P1.

Talks are still in the early stages. Nothing is finalised yet. It may take months before anything concrete happens," sources told Business Times.
Money from the share sale would come in handy for P1's aggressive plans to expand its network coverage in the country.

P1, the first Malaysian company to roll out wireless broadband services using the WiMAX technology, currently covers more than 30 per cent of the population in Peninsular Malaysia.

It aims to cover more than 60 per cent within three years.
Competition among wireless broadband providers is expected to be intense this year, driven by aggressive campaigns by mobile operators Maxis Bhd, Celcom Axiata Bhd and DiGi.Com Bhd.

The YTL group will also officially launch its wireless broadband services at the end of the year.
Despite the tough competition, suitors are keen on P1 as the market holds potential. "Being the market leader in the WiMAX space is certainly a plus point.

Moreover, broadband penetration is still relatively low, indicating good growth potential," said the source.
According to research by companiesandmarkets.com, the country's broadband subscriber base is expected to more than triple to eight million by end-2014 from 2.62 million subscribers last year.

The subscriber base includes both mobile and fixed broadband customers.
P1 has invested close to RM600 million since it launched its broadband services about two years ago. It had some 139,000 subscribers last year.

The company hopes to double its subscriber base by the year-end.
Green Packet group managing director Puan Chan Cheong, when contacted, said it was the company's policy not to respond to speculation or rumours.

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