PETALING JAYA: Will the once hotly-debated merger between Jaring and Time dotCom Bhd become a reality now that the latter has been given a new lease of life with a 3G spectrum?
Sources said the merger would be announced soon and, amid the sketchy details, it would entail Jaring buying over Time dotCom assets for about RM500mil to create another broadband giant.
Time dotCom has an extensive fibre optic network in the country, plus submarine cables that are virtually under-utilised. Jaring is the second largest Internet service provider in Malaysia that is now offering wireless broadband service known as Flite.
The rationale for the 3G spectrum award to Time dotCom is still being questioned by many industry experts but, now that a merger is on the cards, perhaps that was the reason why Time dotCom was named as one of the two winners of the 3G spectrum last week.
“There are synergies in the merger. Jaring gets a strong and wide fibre optic backbone network for its services and, with the 3G spectrum, its reach can be wider. One thing is for sure, a merger of Jaring/Time dotCom would create a stronger entity and, hopefully, would intensify competition in the marketplace,” the source said.
“We need another strong player in the broadband scene to give TM Net a run too.’’ TM Net is the largest player in the broadband market in Malaysia.
Update1:
KUALA LUMPUR (Dow Jones)--TIME dotCom Bhd. (5031.KU) confirmed Wednesday that it is in talks with Jaring Communications, but said it hadn't been informed of whether the state-owned internet service provider wants to buy TIME's assets.Update2:
"We are currently still in discussions. ... At this juncture, there are no significant developments or conclusions that warrant an announcement. We are, however, unaware of Jaring's intention to buy over TIME dotCom assets," the company said in a statement to Bursa Malaysia.
TIME dotCom was responding to media reports that Jaring, an internet services provider owned by state investment arm Khazanah Nasional, may buy its nationwide fiber-optic network and other assets for MYR500 million, and that a deal could be announced soon.
TIME didn't provide details of the talks with Jaring.
Money-losing TIME was one of two surprise winners of a third-generation wireless services license last week, beating out DiGi.Com Bhd. (6947.KU), the country's smallest but fastest growing mobile-phone company.
The government asked TIME and unlisted MiTV Corp. to promote mobile virtual network services as a condition for selling each firm a 3G license for MYR55 million apiece.
TIME, which has a market capitalization of MYR1.46 billion, reported a loss of MYR239 million for the year ended Dec. 31. ~source
Latest: 'Time dotCom in talks with Mimos to buy Jaring'Update
TIME dotCom Bhd is said to have initiated high-level talks with Mimos Bhd with a view to acquiring Jaring, Malaysia's oldest Internet service provider (ISP).
"There are synergies between the companies and a merger is definitely in the cards, but neither Time dotCom or Jaring will be setting the terms of the merger," a government source said.
He said that as the Finance Ministry has sole control over Jaring via Mimos, while various government-linked funds own a controlling stake in Time dotCom, the Ministry will eventually set the terms of the merger.
Time dotCom has an extensive fibre optic network, while Jaring is the country's second largest ISP.
In its filing to Bursa Malaysia, Time dotCom admitted that it was in negotiations with Mimos and Jaring but added that "at this juncture, there are no significant developments or conclusions that warrant an announcement".
Time dotCom went on to add that it was unaware of Jaring's intention to buy over its assets.
"If the companies do eventually merge, it will be Time dotCom that will be buying over the assets of Jaring and not the other way around," a source said.
He said while there is widespread speculation that Time dotCom needs to incorporate Jaring in its 3G plans, this will not be the case.
In a letter dated March 6 2006, the Malaysian Communications and Multimedia Commission (MCMC) confirmed the award of the IMT-2000 spectrum assignment to Time dotCom.
In the same letter, the regulator said the final award of the 3G spectrum is conditional on the submission of a detailed business plan to MCMC within six months from the date of announcement and payment of a spectrum assignment fee of RM50 million.
As Time dotCom will have to work on the 3G proposal immediately, it will not have time to incorporate Jaring in its 3G rollout plans, and so Time dotCom's 3G spectrum rights have nothing to do with the merger talks. ~source
PETALING JAYA: Time dotCom Bhd and Jaring Communications Sdn Bhd said they are still locked in discussions over a proposed merger that could change the future of both companies.
Time dotCom, in a statement to Bursa Malaysia yesterday, said: “We are currently still in discussions with Mimos and Jaring.’’ The Ministry of Finance Inc owns Mimos, which in turn controls Jaring, the operator of the Jaring Internet service.
A Jaring spokesperson said: “Talks are still ongoing.’’ He did not elaborate.
Separately, Time dotCom said in a statement: “At this juncture, there is no significant development or conclusion that warrants an announcement. We are also unaware of Jaring’s intention to buy over Time dotCom assets.
“We will make the relevant and necessary announcements at the appropriate time.’’
Jaring chief executive officer Dr Mohamed Awang Lah, in an e-mail response to queries from StarBiz, said: “As an organisation, our emphasis is on deploying Jaring wireless broadband solutions and bundling them with services like MY015, which is an Internet telephony call service. This ensures that we are purely focused on building a complete value chain.
“Our challenge currently is to resolve the interconnect (with cellular operators) and last mile issues which essentially hinder our ability to field more meaningful services to our customers.
“But, any initiative that would enhance our ability to specifically achieve this and – in general – improve our services in the marketplace, is viewed positively by Jaring.’’
Talk of a merger between Jaring and Time dotCom has been circulating for more than a year but it seemed to head nowhere even though industry experts think Jaring may buy Time dotCom assets for RM500mil.
It is learnt that Jaring and Time dotCom were told to look at the possibility of a merger by the “powers that be’’ over three months ago, yet there seems to be no conclusion to the discussions. What is delaying this merger when both companies have conducted internal due diligences at least twice?
Various reasons were cited by sources familiar with the talks, from “lack of co-operation to lack of information being supplied.’’
This is also the fifth time that Jaring has been courted. Years ago, Telekom Malaysia Bhd courted Jaring for a possible merger with its TM Net, but the move fizzled out.
AtlasOne and even Singapore Telecommunications also came along but nothing materialised. This is Time dotCom’s second go at Jaring.
The question is what value would be created with the merger?
“It is nice to merge and create a bigger entity but there are more doubts than answers in this merger. Yes, 3G is good and Jaring’s Internet service provider is a valid business but there is unfulfilled potential,'' an industry expert said.
“The cost of investment is also going to be huge and what track record is there for these companies to become a player like TM Net in broadband services?’’ the expert asked.
Time dotCom was named one of the two winners of the 3G spectrum recently. ~source
Related post: jaring, time, broadband, 3g, news
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