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Telekom Malaysia buys 57% of Packet One (P1), 4G LTE launch this year

Telekom Malaysia entered into an investment agreement with Green Packet Berhad and SK Telecom Co. Ltd to acquire a 57% stake in Packet One Networks (Malaysia) Sdn Bhd.

TM-P1-Green-Packet[From left: Jung Ho Park, Executive Vice President and Chief Growth Officer, SK Telecom Co., Ltd; Datuk Che Azemi Haron, Deputy Secretary General II, Ministry of Communications and Multimedia; Dato’ Sri Abdul Rahim Mohamad Radzi, Secretary General, Ministry of Communications and Multimedia; Suk Hwan Lee, President, Southeast Asia, SK Telecom Co., Ltd; Tan Sri Zamzamzairani Mohd Isa, Group Chief Executive Officer, TM; YB Dato’ Sri Ahmad Shabery Cheek, Minister of Communications and Multimedia; Puan Chan Cheong, Group Managing Director and Group Chief Executive Officer, Green Packet Berhad; Dato’ Sri Dr. Halim Shafie, Chairman, TM; Tan Sri Datuk Dr. Haji Omar Abdul Rahman, Chairman Green Packet Berhad; A. Shukor S.A. Karim, Chairman, Packet One Networks (Malaysia) Sdn Bhd; and Dato’ Mohid Mohamed, Deputy Secretary General I, Ministry of Communications and Multimedia at the signing ceremony ]

As part of the Investment agreement , TM will initially invest RM350 million into P1 via the subscription of new ordinary shares to make TM the majority shareholder in the company, with Green Packet and SK Telecom remaining as key strategic shareholders.

TM will additionally invest up to RM210 million into Green Packet via newly issued redeemable exchangeable bonds, which may be exchangeable into Green Packet’s stake in P1 in the future.

Responding to a question from MalaysianWireless, TM said that it will partner with Green Packet to invest up to RM1.65 billion(over 1-3 years) into P1 which most of the fund would be use for P1’s operation.

Puan Chan Cheong, who is the Group Managing Director of Green Packet and CEO of P1 told MalaysianWireless that the company will retain its 2.3Ghz WiMAX network for the next 3-5 years. “We will slowly migrate our WiMAX users to LTE,” he added.

P1 is set to launch LTE via the 2.6GHz band. It an email to subscribers today, P1 said that the LTE service will be available “as early as this year-end”.

On the partnership, CC Puan added, “We welcome the entry of TM as a strategic shareholder alongside us and SK Telecom. This union of P1, the innovative and enterprising challenger, with big name giants in the telecom sector, is a positive on many levels. As Malaysia’s Broadband Champion, TM will bring significant synergies to our existing business capabilities and SK Telecom’s enhanced commitment to the P1 business is not only affirming, but will strongly transition P1 into the LTE era.”

The Investment Agreement will come into effect upon completion of all conditions precedent, including the relevant regulatory and Green Packet shareholders’ approvals. Subject to all such approvals being obtained, the Investment Agreement is expected to be completed within the next few months. The parties said that it will make the appropriate announcements accordingly.

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