TIME DOTCOM, DIGI FORGE ALLIANCE
KUALA LUMPUR, Nov 14: Time dotCom Berhad (TdC) and DiGi.Com Berhad (DiGi) have forged an alliance by pooling their resources across several service categories and infrastructure, including 3G services.
The alliance will enable TdC to expand its other business and related services via DiGi's wireless infrastructure and distribution networks, while DiGi taps into TdC's extensive nationwide fibre optics network for an initial period of at least three years. This will create additional revenue stream of between RM10 million and RM15 million per annum for TdC.
Under the alliance, TdC will inject its 3G spectrum to DiGi, which will enable DiGi to strengthen its multi offerings. In exchange, TdC will secure a 3.5 percent stake or 27.5 million new shares in DiGi.
To strengthen the alliance, TdC will participate in a bookbuilding exercise of DiGi shares to be undertaken by CIMB Investment Bank Berhad on behalf of Telenor ASA, which has to pare down its stake from the current 61% to 49%.
In announcing the alliance, which is subject to regulatory approval, Dato' Wan Muhamad Wan Ibrahim, chairman of TdC, said the move would enable TdC to expand its businesses and other related services via DiGi's wireless infrastructure networks.
Each telco may also distribute its respective services to each other's customers to deliver converged fixed and mobile services. Besides cross selling, both companies will optimise infrastructure investment, share towers, exchange technical support and leverage on their nationwide distribution.
In addition, both TdC and DiGi will establish a knowledge-sharing programme for human capital development and conduct joint studies to identify and develop additional areas of cooperation.
Dato' Wan Muhamad said, "This alliance allows both companies to come out winners while at the same time permitting us to focus on our core businesses and increase the breadth and quality of services for our customers."
DiGi's Chief Executive Officer Morten Lundal said, "This alliance enables DiGi both to offer competitive broadband services and to produce voice even more efficiently, benefiting consumers with higher value and lower costs."
Lundal said, "We believe this is a win-win for both Time dotCom and DiGi, and we look forward to working together to create even better telecommunication solutions for consumers. With the 3G platform, DiGi will contribute towards the ambitious broadband penetration goals that Malaysia has set."
Wan Muhamad went on to say that upon the alliance being finalised and with a strategic stake in hand, TdC will gain board representation in DiGi.
"We look at this alliance as a good starting point to leverage on each other's assets and know-how. TdC will at the same time embark on improving the operational efficiency of the company by refocusing and concentrating on delivering higher value added services such as managed network services, fiber management and WiMAX.
"This will be realised through internal efforts as well as by exploring potential partnerships with local players. In this regard, we and our shareholders have in the past, received a number of proposals from potential partners for possible collaborations to strengthen TdC's operations."
"Following the alliance with DiGi, TdC will actively explore these local partnership proposals to enhance our operations, create value for our shareholders and potentially become national champion in the areas where TdC and the local partners have competitive advantage, such as in managed network services, fiber management and WiMax," added Wan Muhamad.
The Heads of Agreement outlining the strategic alliance was signed by Wan Muhamad and Lundal, and witnessed by Dato Baharum Salleh, Managing Director of TdC and Stefan Carlsson, DiGi Chief Financial Officer.
The alliance is subject to shareholders' approval of both companies which will be tabled at their respective Extraordinary General Meetings at a later date to be determined.
Corporate Communications Department
DiGi Telecommunications Sdn Bhd