TM to announce its acquisition of P1 tomorrow?

UPDATE: TM invests RM350 million for 57% stake in P1 to roll out LTE services. More details here.

Months of speculation on who will acquire P1 may very well come to an end tomorrow if a media invite issued by Telekom Malaysia is anything to go by.

The invite issued today stated that Malaysia’s largest broadband provider “will be signing a milestone agreement with several industry players that are involved in wireless technologies for a collaboration which will bring immense benefit to the telecommunications industry as well as the Malaysian consumers at large.”

Interestingly both TM and Green Packet — the company that holds controlling stake in P1 — has suspended trading of share for tomorrow.

According to a Malaysian Reserve report citing sources close to the matter, TM is believed to have successfully acquired a controlling stake in 4G operator, P1.

“All details of the deal are being finalised. A signing ceremony between Green Packet and TM will be held soon.
“TM is buying a portion of Green Packet’s stake in P1,” said the source.

Predictably, TM has refused to comment on the matter but the prevailing rumour indicates that TM is expected to dish out over RM2 billion for P1 stake in a bit to expand its product portfolio beyond fixed broadband services.

The news brings to closure the much-delayed merger and acquisition exercise involving P1 since 2011, with the shortlisted potential buyers besides TM, included DiGi and YTL.

The merger is important to TM as it looks to diversify its business beyond fixed broadband services. Troubled 4G operator P1 owns valuable wireless spectrum, including the 2.3GHz band (that is currently being use for its WiMAX network), and the 2.6GHz band, which can be used for 4G LTE services. TM on the other hand, has the 450MHz and 850MHz bands that it has been using for CDMA voice and data services. While these lower bands can be used for LTE, the 2.6GHz band is one of the two widely accepted standard in Malaysia (the other being the 1800MHz band) allowing TM to tap into a bigger catalogue of LTE equipment and devices that in turn will make network expansion and subscriber acquisition relatively easier.

“If the deal happens, TM will gain access to P1’s existing customer base and valuable infrastructure that can be utilised by TM for faster growth in the wireless segment.

“TM will then be a very large player in the business, as they would have a combined deployment of low- and high-frequency bands,” an analyst told The Malaysian Reserve.

TM has set an ambitious target for its wireless business. By 2017, the operator wants to have 1 million wireless subscribers and the acquisition of P1’s 2.3GHz and 2.6GHz spectrum will be key to this goal. By acquiring P1, TM will not only have access to P1’s existing customer base but also to P1’s valuable infrastructure that consists of over 2,000 base stations nationwide including East Malaysia.

Read the full Malaysian Reserve report here.