"We believe that this is only the start and we will work with them to explore the other 4G wireless broadband opportunities in other countries in the South East Asia region," its group managing director Puan Chan Cheong told Business Times in an interview on Thursday.
Earlier this week, Korea's SK Telecom said it would purchase a 25.8 per cent stake for US$100 million (RM322 million) in Green Packet's unit, Packet One Networks (Malaysia) Sdn Bhd (P1), which is a high-speed wireless broadband provider.
"We were approached by many international big telcos but we chose SK Telecom because Korea as a country has the best broadband services in the world. SK Telecom has had remarkable success in the last decade bringing quality high-speed broadband to households and it is the biggest mobile operator in Korea with 28 million subscribers," he said.
Puan added that P1 was still a relatively new company and SK Telecom will have the ability to develop "the young kid into a full mature adult".
"SK Telecom will bring the large skill network experience and technology as well as innovative products and services to the Malaysian market," he said.
While the P1 management team remains intact, SK Telekom will second a chief business development officer to P1.
The US$100 million investment will be utilised to partly cover P1's capital expenditure (capex), accelerate its roll-out and improve its end-to-end user experience.
" We want to be more aggressive in our plan for customer acquisition and providing innovative services," he added.
Some RM550 million was spent for P1 to reach 35 per cent population coverage as at end of last year. For it to achieve 65 per cent coverage by 2012, it will cost up to RM1 billion.
"We have secured the necessary funds - we have signed a vendor financing agreement with ZTE (Corp), where they will finance up to RM500 million," he added.
For this year, its capex will be some RM250 million. It has already spent RM100 million on upgrading network and expanding coverage in the first half of the year.
Puan added that Green Packet is maintaining that its Ebitda (earnings before interest, tax, depreciation and amortisation) will break even by the end of this year.
"Our target remains the same but SK Telecom has expressed a few strategies it may want us to look into which include being more aggressive in our coverage expansion, advertising and promotion and ensuring the customer's experience," he said.
These considerations will require further investments, which in turn raises operating expenditure that could have an impact on its Ebitda.
"We are currently consulting with our new shareholder and will share the new plan once it is firmed up within the next three to six months. They may want us to be a little more long-term in our plan to have a better market penetration instead of focusing on the financial," he said.
However, he re-affirmed that the company will reduce its (net) losses and negative Ebidta as it improves on a quarter-on-quarter basis.
By Jeeva Arulampalam
Business Times
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