SKT pays $100m for stake in Wimax operator

Robert Clark
28 May 2010

SK Telecom is to pay $100 million for a 25% stake in Malaysian Wimax operator Packet One (P1).

P1, an arm of listed firm Green Packet, has signed up more than 175,000 subscribers since its launch in August 2008.

SK Telecom said the investment aimed to take advantage “the huge growth potential” of the local market.

The investment is the first since it revamped its international expansion strategy after selling its stakes in failed US MVNO Helio and China Unicom.

It aims to use the P1 investment to sell fixed-mobile and convergence solutions to businesses in southeast Asia. It has huge ambitions for the strategy, known as Industry Productivity Enhancement (IPE), predicting it will take $16 billion in revenue by 2020.

SK Telecom CEO Man Won Jung said: “P1 has huge growth potential with its success in the nation’s first deployment of Wimax service and adoption of differentiated marketing strategies.”

Green Packet, which also sells Wimax modems and wireless network software, announced a net loss of RM45 million ($14m) in the first quarter of 2010 on sales of RM87 million ($26m).

P1 says it will double its base station sites to reach 45% coverage by the end of 2010. It also expects subscriber numbers to double to approximately 280,000 with an ARPU of RM80.

Green Packet holds Malaysia’s sole nationwide Wimax license and another license in Singapore. It says it hopes to acquire two more southeast Asian licenses by 2013.

Said Analyst David Lee from CLSA Korea: “I don't think this is a good investment as the Malaysian company is still losing money and faces stiff competition from Telecom Malaysia going forward.”

The agreement was likely to be finalized in June, SK Telecom said.

SK Telecom’s stock on the NYSE fell 11 cents in after-hours trading overnight to 15.60.

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