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Wednesday May 2, 2012

Optinet in 3-cornered fight for Jaring

PETALING JAYA: The fight for Jaring Communications Sdn Bhd has turned into a three-cornered one with the entry of Optinet Technology Sdn Bhd, a special purpose vehicle representing four local companies.

The four are namely Melaka ICT Holdings, Ersatech Sdn Bhd, Dignity First Sdn Bhd (in which blogger Rocky Bru or Datuk Ahirudin Attan is a shareholder and director) and Jom Mobile. All four companies hold an equal 25% equity stake in Optinet.

All the four shareholders of Optinet had conducted a due diligence on Jaring and they found that Jaring has tremendous growth potential, Optinet director Shaharom Md Shariff said in an interview recently.

“Jaring provides the best skill sets, network and licences for Optinet to move ahead as our vision is to provide broadband services to consumers and get into the content business where we want to push content to users,” he adds.

For them to apply for licences and set up a network would take time and the “easiest way is to buy and not re-invent the wheel. It helps us leapfrog into the content business and we have enough cash to rollout and make Jaring sustainable,'' he adds.

The other two companies that had also put in bids for Jaring are Puncak Semangat Sdn Bhd and CMC Engineering Sdn Bhd.

It is learnt that Puncak Semangat submitted its proposal to the Finance Ministry two weeks ago while the others had submitted their proposals in March.

It is not known when the ministry will decide on which of the three will get to buy Jaring, but a major consideration would be a viable business plan to turn Jaring around and the RM80mil-odd debts. Jaring was the pioneer in bringing Internet services to the country.

As it is, the partners in Optinet are already entrenched in the network infrastructure built-up, maintenance and content game.

Shaharom said Melaka ICT had expertise in the area of technical and network, Ersatech is involved in telecommunications towers in Selangor, Dignity is in the business of content creation and distribution, and Jom Mobile has the technical team needed to drive the business.

Shaharom said Melaka ICT was currently laying fibre-opics in Malacca to offer broadband services and this was done with the intention to bring down the overall cost of broadband services.

“We want to make a change in the market place by bringing down the cost of broadband access and that was another reason why we are bidding for Jaring as Jaring has an existing infrastructure we could align with fibre. As far as laying of fibre is concerned, if it works well in Malacca, we could replicate the model to other states.”

Shaharom believes the cost of broadband in the country is relatively high and it should be brought down so that a larger population can ride on the broadband wave.

He also brushes aside speculation that Optinet is politically connected.

“We have no political links. We submitted a bid because we have a strategy to ride on Jaring to deliver content to consumers,” he said.

Jaring has been a takeover target for many years.

As far back as 2001, Telekom Malaysia Bhd (TM) had first expressed interest in buying Jaring. That didn't materialise. Interestingly, a government budget speech a few years later had also indicated that Jaring would merge with TM, but that too didn't materialise.

Later, Time dotCom Bhd had sought to acquire Jaring but its low offer price didn't interest the Government.

Subsequently in 2007/08, a tender exercise was called by the Finance Ministry, using an advisory firm to handle the bids. Again, Time dotCom was one of the bidders, along with four other parties including Packet One Networks Sdn Bhd. Then the parties were said to have offered between RM15mil and RM27mil

It is not known why Puncak Semangat wants to buy Jaring but it can be presumed that it would need a network infrastructure and a skilled team, which Jaring has, to kickstart its journey into the telecoms world since it is slated to get a block of the LTE 4G spectrum sometime this year.

CMC Engineering has its own plans to use the Jaring network to set up a syariah-compliant data centre for the Asean region, among other things.

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