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Maxis & REDtone enter into infrastructure agreement to offer LTE service next year

Both Maxis Berhad (Maxis) and REDtone International Bhd (REDtone) today entered into an infrastructure and spectrum sharing agreement that will enable both companies to collaborate on LTE service rollout next year.

[YM Raja Tan Sri Arshad Bin Raja Tun Uda, Chairman, Maxis Berhad  (2nd from left) exchanging documents with Dato’ Ibrahim Bin Che Mat, Chairman,  Redtone International Bhd (3rd from right). With them are (from left), Mark Dioguardi, Joint Chief Operating Officer, Maxis Berhad, Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Al Habshee, Deputy Chairman, Redtone International Bhd, Datuk Idris Abdullah, Commission Member, Malaysian Communications and Multimedia Commission, Dato’ Wei Chuan Beng, Managing Director, Redtone International Bhd and Dato’ Ismail Bin Osman, Senior Executive Director, Redtone International Bhd ]

LTE or Long Term Evolution offers high speed wireless broadband service, up to 150Mbps. Both Maxis and REDtone are looking to launch their “4G” LTE services early next year in selected areas of the Klang Valley, with other regions to follow closely thereafter.

In a statement, the companies said that the infrastructure sharing partnership between Maxis and REDtone responds to the Government’s call for telcos to reduce duplication of network assets, enabling operators to deliver better services. This collaboration will also accelerate broadband penetration in the country, paving the way towards achieving the nation’s National Broadband Initiative aspirations besides enhancing digital lifestyles and the content industry. Infrastructure sharing also helps to reduce capex outflow from the country and maximises usage of spectrum, a scarce and valuable resource.

Maxis Chief Executive Officer, Sandip Das said, “We have been at the forefront of promoting networks to be shared as we have recently commissioned active network sharing on 3G with U Mobile. Data networks are onerous and have to be built carefully. The demand for data is not disputed, but the inflection point is some time away. Sharing will get REDtone up and running quickly and also fetch adequate returns on our investments, besides conserving spends at a national industry level. We are looking to set a new benchmark in data service quality as this will help us design a more effective infrastructure.”

“The network sharing and alliance agreement with Maxis is a significant development for REDtone as we build on our broadband business. It will help to address REDtone’s rollout obligation to cover 50% of the country’s population,” said REDtone Managing Director Dato’ Wei Chuan Beng.

“For REDtone to comply with the 50% rollout requirement, our capex would have been RM390 million as is stated in our detailed business plan (DBP). However, this has been mostly replaced by riding on Maxis’ existing infrastructure and leasing the necessary capacity from Maxis,” added Dato’ Wei.

REDtone is expected to launch its mobile broadband services and products riding on the shared network in 2013. This will provide an additional source of revenue to the group, the company said. At the moment, REDtone currently offers WiMAX service in East Malaysia using the 2.3Ghz spectrum.

So far, Maxis has invested RM3.7 billion in capex in the past three years resulting in 95% 2G and 81% high speed 3G coverage of the population. Maxis now has 3,400 of its 5,200 3G sites enabled with 42Mbps capability.

“Our signing with U Mobile in October last year was the first of its kind in Malaysia covering active RAN sharing, and are working towards the full launch of more than 1,300 shared sites in the coming months. This partnership with REDtone will deliver even more benefits to Maxis and the industry,” concluded Sandip.

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy