DiGi to spend RM800m on 3G rollout

MOBILE phone operator DiGi.Com Bhd plans to invest up to RM800 million under a three-year plan to provide services like faster video downloads and Internet access.
The company is buying the necessary airwaves from Time dotCom Bhd in an all-share deal worth some RM655 million.
It will also partner Time dotCom to develop new products and share transmission towers, among other things.
"This is a fair deal," chief executive officer Morten Lundal said in a briefing in Kuala Lumpur yesterday. Time dotCom obtained the spectrum from the government for some RM50 million.
Lundal said the price DiGi is paying is fair due to the benefits it will get from the airwaves over the long term.
DiGi will also spend another RM150 to RM200 million in capital expenditure to set up the network infrastructure for third-generation telecommunications services next year.
It will use internal funds to roll out the network.
Meanwhile, Time dotCom chairman Datuk Wan Muhamad Wan Ibrahim said the company is eyeing a five per cent stake in DiGi.
"We want to be a substantial shareholder in the company," Wan Muhamad said.
He said the company hopes to buy another 1.5 per cent stake through Digi's book-building exercise, which started yesterday.
Time dotCom will have 3.5 per cent stake and board representation in DiGi once a definitive agreement on the alliance is signed in two-and-a-half months.
For Time dotCom, the deal will create additional revenue of between RM10 million and RM15 million a year as it leases out its fibre optic network to DiGi.
Time dotCom and DiGi will also develop a knowledge-sharing programme for human capital development and conduct joint studies to identify and develop additional areas of cooperation.
According to Time dotCom managing director Datuk Baharum Salleh, DiGi and Time dotCom have already started discussions on how the products, research and network of the two companies can work together.