The Source and Wimax

Posted on Star Biz:

http://biz.thestar.com.my/news/story.asp?file=/2007/2/15/business/16888018&sec=business

• Thursday February 15, 2007
  
  YTL-e, Green Packet emerge as WiMAX frontrunners
  
  By C.S.TAN
  
  PETALING JAYA: YTL e-Solutions Bhd (YTL-e) and Green Packet Bhd are the frontrunners to secure WiMAX licences, according to sources yesterday.
  
  WiMAX is a new standard for wireless broadband that covers long distances. Securing that spectrum would enable the companies to become full-fledged cellular companies (celcos) that can offer voice, data and video services on mobile phone networks.
  
  Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik told the media last month he would announce the winners of the WiMAX spectrum not later than the end of this month.
  
  However, he also indicated that while up to four WiMAX licences may be available, he might announce two winners this month and another two later.
  
  YTL-e and Green Packet groups are believed to be successful in their applications for WiMAX but it is not clear if both are among the two winners to be announced this month.
  
  It is also not clear if DiGi.Com Bhd would be one of the winners. One of the issues it faces is that Telenor of Norway owns 61% of DiGi although foreign companies are currently allowed to own up to only 49% of local telecoms firms.
  
  Under Telenor, DiGi has been competitive and its network is hugely popular, as seen from its high subscriber growth.
  
  Speculation was rife in the stock market yesterday that YTL-e and Green Packet would win the WiMAX spectrum. YTL-e shares surged 12 sen to 57 sen on volume of 86.1 million shares while Green Packet jumped 15 sen to RM5.25 on a volume of 1.6 million shares.
  
  Both groups submitted their applications through their member companies that are licensed service providers, which qualify them to bid for WiMAX spectrum.
  
  YTL-e announced in late December it would subscribe to new shares in Bizsurf (M) Sdn Bhd, giving it a 50% stake in the company.
  
  Bizsurf is one of 17 licensed service providers that have applied for and are being considered for the 2.3GHz spectrum for WiMAX deployment.
  
  YTL-e would pay RM1.3mil cash for the 50% interest in Bizsurf. This is a small sum for YTL-e, which reported in its last financial results that it held RM167.8mil cash.
  
  A member of the YTL group, the Mesdaq-listed YTL-e is mainly engaged in developing technology companies and services.
  
  Green Packet's bid for WiMAX is through MIB Comm Sdn Bhd, which is 55% owned by Packet One International Sdn Bhd, a subsidiary of Green Packet.
  
  Packet One bought the MIB Comm stake in December for RM6mil cash, on condition that an additional RM3mil would be paid to the vendors if the company secured the 2.3GHz spectrum.
  
  MIB Comm holds several licences from the Malaysian Communications and Multimedia Commission (MCMC) that would enable Green Packet to deploy its SONmetro wireless broadband infrastructure in the country.
  
  Green Packet is currently installing its SONmetro infrastructure in the Klang Valley that can deploy broadband services using fourth-generation (4G) technology and long-range WiFi coverage. The group's infrastructure would be enhanced if it secures a WiMAX licence.
  
  The company is also cash-rich, reporting it had RM125mil in cash at end-September last year. That would have been boosted by a private placement in November of new Green Packet shares issued at RM4.50 each, which raised RM182mil cash.
  
  It would thus have over RM300mil in cash.
  
  “It would be a red packet for Green Packet for the Chinese New Year if they get the WiMAX licence,” said a fund manager.
  
  Green Packet, with a market value of over RM2bil, is the largest company on the Mesdaq Market. The company is led by chief executive officer Puan Chan Cheong.
  
  The issue of WiMAX licences to corporates that have the resources and technology would be a step towards achieving the Government's objective of raising the penetration rate of broadband subscription and usage.

How?