Mon, Sep 26, 2011 - Page 12 News List

Vee Time to acquire Vmax Telecom

WIMAX FIRSTS:The acquisition would be the first consolidation deal in the crowded WiMAX market and mark the first time an operator has offered nationwide coverage

By Lisa Wang  /  Staff Reporter

Local WiMAX operator Vee Time Corp (威達雲端) has decided to fully acquire local peer Vmax Telecom Co (威邁思) for NT$1.45 billion (US$47.72 million) in an effort to expand its network coverage and customer base.

Vee Time, which provides WiMAX services in Greater Taichung, said it planned to buy 200 million Vmax shares at NT$7.25 a share, according to a company statement filed to the Taiwan Stock Exchange on Saturday.

The company’s decision came after its board approved the plan earlier on Saturday, making it the first consolidation deal in the nation’s crowded WiMAX market, cutting the number of the nation’s WiMAX operators to five from six.

Vee Time’s decision was bigger than its original plan of acquiring a 50 percent stake in Vmax from Vmax shareholders Vibo Telecom Inc (威寶電信) and Intel Corp.

Vmax is 34 percent held by Vibo, 18 percent by Intel and 48 percent by local telecoms equipment maker Tecom Co (東訊).

Tecom said on Saturday in a separate filing that its board had given the go-ahead to offload 77.92 million Vmax shares for NT$506.48 million, or NT$6.5 a share, which is lower than the NT$7.25 Vee Time offered.

Tecom said in the filing it would make NT$37.11 million in profit from the transaction, which would be part of its efforts to “sell non-core assets and to strengthen its financial ability.”

The government in 2009 issued licenses to six local companies to offer WiMAX services in either the north or the south of the country. In addition to Vee Time and Vmax, the other four WiMAX operators are Global Mobile Corp (全球一動), Far EasTone Telecommunications Co (遠傳電信), First International Telecom Corp (大眾電信) and Tatung InfoComm Co (大同電信).

However, Intel announced in July last year it would integrate its WiMAX Program Office with the company’s other business units, a move that raised concerns among its Taiwanese partners and the Ministry of Economic Affairs about the US chip giant’s commitment to WiMAX technology.

As of the end of March, there were only 58,300 WiMAX subscribers in Taiwan, which has not only cast a shadow over the future of WiMAX usage in the country, but also prompted Taipei Computer Association (台北市電腦公會) chairman J.T. Wang (王振堂) to urge existing operators to merge for greater economies of scale.

In June this year, Vibo said it intended to sell its shares in Vmax to focus on its 3G network upgrade, given limited resources, while Global Mobile said in May it was planning to switch over to Long Term Evolution (LTE) technology from WiMAX for a 4G wireless service.

Vee Time, based in Taichung, will become the nation’s first WiMAX operator with nationwide network coverage following the transaction, which is still pending regulatory approval.

The deal aims to “boost WiMAX subscribers and to provide users with nationwide coverage, as well as to increase company value,” Vee Time said in the statement.

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