P1 Acquisition: Announcement Happening Soon?

While the question of who’s acquiring wireless telco P1 is still up in the air, a report by The Star points out very strong reasons that TM could be its new buyer.

TM which has strong footing in the fixed broadband business has plans to roll out LTE service this year. While it has allocation to operate with the 450MHz and 850MHz spectrum, it isn’t enough to deliver full 4G services especially data. Their lower frequency spectrum has the advantage of better coverage but it has limited capacity for high-speed data transfers. To fulfil the gap, TM needs to partner or acquire a telco that has allocation for the higher 2600MHz spectrum and P1 is currently looking like an ideal choice. Previously we heard that TM intends to roll out LTE by February and it is likely to be held back until this merger or acquisition is finalised.

Rolling out LTE will be a daunting task for TM and they have set an ambitious target of 1 million subscribers by 2017. By acquiring P1, it not only gives them a chunk of its existing customer base but also its valuable infrastructure that consists of over 2,000 base stations nationwide including East Malaysia. This would definitely give TM a good head start instead of rolling a new wireless network from scratch.

The report also added that while demand for fixed data is strong, it is seeing a slowdown in terms growth. This spurs the urgency to look into other potential areas such as wireless services. Considering the vast availability of 4G LTE devices even for entry level smart phones, wireless data is broadly seen as the next area of growth. At the moment, Maxis is a dominant 4G LTE player while Celcom, DiGi and U Mobile are aggressively expanding its coverage and services. If TM intends to be a formidable player, they would definitely need a fast forward route just to keep up with the competition.

So far there’s nothing official yet but we expect both P1 and its new buyer to make an announcement very soon.

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