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Tuesday November 13, 2007
By B.K. SIDHU
Tie-up will see celco gaining access to 3G spectrum
PETALING JAYA: The much speculated tie-up between DiGi.Com Bhd and Time dotCom Bhd (TDC) is set to materialise with DiGi acquiring newer market segments and the latter getting a new lease of life.
Details on the tie-up are kept under wraps but the merger is likely to address the shareholding issue in DiGi of its parent, Norwegian Telenor ASA, which has till year-end to reduce its shareholding in DiGi from 61% to 49%.
What stake Khazanah Nasional Bhd will eventually hold after the merger is not clear even though it now has nearly 65% equity stake in TDC. Khazanah had in the past made it clear that it wanted to restructure TDC by year-end.
But what is clear, according to sources, is that the merger will see DiGi gaining access to the much needed 3G spectrum that it was denied in the last 3G bidding exercise.
DiGi in a statement to Bursa Malaysia at noon yesterday requested that trading of its shares be suspended till end of trading today.
TDC in a statement to Bursa said DiGi would be making the announcement. Those in the know claim that several announcements can be expected beginning tomorrow but this could not be verified at press time.
After months of speculation of a DiGi-TDC merger that both parties vehemently denied, the tie-up could soon be a reality.
This bodes well for Malaysia’s telecoms sector as DiGi has proven to be a very aggressive player and a trendsetter in the mobile sector.
Given that TDC has a vast fibre optic network that is virtually un-used, the partnership offers new hope of more competition in the fixed and wireless broadband sectors.
“Competition is much needed in the broadband sector to drive prices down and improve on quality of service and given DiGi’s success in revolutionising the cellular sector, it would be no surprise that the broadband sector is headed for some exciting times,” said an analyst.
Analysts see DiGi in a “competitive disadvantaged position in the longer term due to its lack of a 3G spectrum” but the tie-up would definitely change this, allowing the once smallish celco to offer a multitude of new offerings it was unable to in the past.
DiGi chief executive officer Morten Lundal hadpreviously said the company “would prefer a 3G spectrum ... more spectrum would allow us to plan our network more efficiently.”
“We would also like to have broadband spectrum. Given the headway we’ve made in the mobile sector, DiGi’s entry in broadband market will drive competition and expansion, which I think consumers would applaud and the Government would appreciate, since broadband growth is seen as important by all,” he added.
DiGi shares fell 80 sen to RM23.60 while TDC lost 2.5 sen to 87 sen. Time Engineering Bhd, which owns 33% in TDC, fell 13 sen to 78 sen yesterday.
DIGI : [Stock Watch] [News]
TIMECOM : [Stock Watch] [News]
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