Local telecom carrier Vibo Telecom Inc (威寶電信) is in talks with two potential buyers to sell its stake in WiMAX operations, backed by Intel Corp, to refocus on turning around its 3G business, a company executive said yesterday.
Vibo owns a 34 percent share of Vmax Telecom Co (威邁思), while Intel and local equipment maker Tecom Co (東訊) hold an 18 percent and 48 percent share respectively.
Vibo’s plan to dump its Vmax share apparently matches Intel’s WiMAX phaseout after downsizing its local WiMAX office and a plan to sell part of its stake in US WiMAX operator Clearwire Corp early this month.
“We are determined to sell [the Vmax stake] … To [better utilize] limited resources, we have to concentrate on our core business,” Vibo chief executive George Chou (周鐘麒) told reporters yesterday. “Our 3G coverage is not sufficient yet.”
It would be Vibo’s top priority to boost the company’s network coverage, Chou said, as the 3G telecom service provider did not operate a 2G network, which major telecom operators have used to serve as a makeshift 3G network in remote areas, or used as a 3G substitute when traffic spiked in urban areas.
Vibo is hoping to fully upgrade its base stations to 3.75G by the end of this year on an initial budget of NT$3 billion, Chou said last week.
“Two companies, including a telecom operator, have shown an interest,” Chou said.
It was a strategic investment by Vibo to purchase Vmax shares, Chou said last week.
Far EasTone Telecommunications Co (遠傳電信), the nation’s third-largest telecom operator and WiMAX operator, and Japan’s biggest WiMAX operator, UQ Communications Inc, have expressed interest to overtake Vibo as a major shareholder in Vmax, the Chinese-language Economic Daily News reported earlier this month.
The deal would help Far Eas-Tone expand its WiMAX coverage to the northern part of the nation. Far EasTone won a license to deploy a WiMAX network in -southern Taiwan, while Vmax won a license to provide 4G services in the north.
Vibo currently has 1.9 million users, making it one of the nation’s smallest wireless telecom operators.
The company’s plan to exit the WiMAX business would be part of its broader restructuring effort, headed by Chou, who was tapped as the company’s new CEO late in March.
The restructuring efforts also include an expansion of its customer base to 2 million users by the end of the year and to revamp the existing distribution channel, Chou said.
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