PETALING JAYA: DiGi.Com Bhd is actively looking to acquire new telecommunications spectrum to sustain its growth plan in Malaysia. Part of the plan could be acquiring companies that own such spectrum, such as the four companies that have the 2,300 megahertz (MHz) spectrum.
Such a prospect could be a repeat of DiGi’s 2008 deal in which it had secured the rights to valuable 3G spectrum from Time dotCom Bhd for a whopping RM700mil.
Analysts highlighted this prospect in their recent reports after a meeting last week with DiGi’s top management, including its new chief financial officer Karl Erik Broten.
“DiGi shared that it was exploring ways to acquire low-frequency bands such as the 900MHz band,” wrote Tan J Young in his report dated Aug 16.
But the analysts themselves were quick to point out that such a prospect was problematic.
“We think that this may be challenging, given that the two incumbents, namely, Celcom Axiata Bhd and Maxis Communications Bhd, would be unwilling to give up (their 900MHz) spectrum, as it is valuable for 3G refarming,” Tan said in his report.Analysts said that mobile operators were freeing up some of their 1,800MHz band to make room for long-term evolution (LTE) or 4G services. Part of that involves moving 2G customers from the 1,800 band into the 900 band, something which Maxis and Celcom are finding easier to do because of their excess 900 spectrum.
Although the newly dished out 2,600MHz spectrum is meant for 4G/LTE, analysts said it was costly and not efficient to use that spectrum presently.
Simply put, the higher the frequency spectrum, the higher the data capacity, but the lower the coverage area. So, the 2,600MHz would be ideal in a world where data usage was at its highest.
In a reply to queries from StarBiz, DiGi’s chief of strategy and corporate affairs Christian Thrane said: “Our limited 900Mhz spectrum poses a challenge with regards to easing capacity on the 1,800MHz band. A larger allocation of 900MHz spectrum would allow us to do this more effectively, and would enable us to deliver 4G/LTE services to more customers today.”
However, analysts reckon that considering the challenges in securing more 900MHz spectrum, DiGi could be considering acquiring companies operating on the WiMAX spectrum, which is on the 2,300MHz band.
On such a prospect, DiGi’s Thrane said: “We are constantly looking for ways to improve the balance of our spectrum portfolio, especially in the lower band frequencies, and would naturally evaluate all viable opportunities to do so.”
- The Star Biz
