Far EasTone Telecommunications Co (遠傳電信) is to pay up to NT$5 billion (US$169.3 million) to acquire an 11.58 percent stake in Asia Pacific Telecom (APT,亞太電信), it said in an unexpected announcement late on Friday.
The deal is the first part of Far EasTone’s broader plan to deepen partnerships and trim heavy 5G deployment costs through spectrum sharing, it said.
It is Far EasTone’s second equity investment after its 2003 acquisition of KG Telecommunications.
Photo: Chang Chia-ming, Taipei Times
It also marks the nation’s first 5G spectrum sharing deal after the National Communications Commission allowed sharing, which is initially limited to the 3.5 gigahertz (GHz) band.
Far EasTone plans to subscribe to 500 million new shares issued by APT, which is 40 percent owned by Hon Hai Precision Industry, it said.
Hon Hai’s APT stake is to fall to about 36 percent after the transaction.
The spectrum-sharing deal would “help Far EasTone gain better spectral efficiency and reduce network deployment costs, allowing more leeway for the company to develop 5G-enabled applications,” Far EasTone president Chee Ching (井琪) said in a statement.
During government auctions in February, Far EasTone spent NT$43.04 billion on securing 5G spectrum on the 3.5GHz and 28GHz frequency bands.
The deal would give APT much-needed access to the 3.5GHz frequency band for 20 years, allowing it to catch up with rivals in launching its 5G services by the end of the year.
APT is the only telecom carrier that has not yet offered 5G services.
APT also agreed to pay NT$9.47 billion to use the spectrum and share about 22 percent of the network deployment costs, a joint statement said.
The 3.5GHz frequency band is considered to be a prime 5G bandwidth, suitable for smart cities and factories.
APT only secured 400 megahertz in the 28GHz spectrum for NT$412 million, but telecom equipment supporting the 28GHz spectrum is not yet ready for commercial use.
The Far EasTone-APT deal is still subject to commission approval.
In the second part of its investment scheme, Far EasTone is to further boost its stake in APT to about 23.8 percent by the end of June 2022 through a share-swap deal in which Hon Hai would obtain about a 2.45 percent stake in Far EasTone, the statement said.
The deal would give Far EasTone two seats on APT’s board of directors.
Far EasTone’s announcement caught industry analysts off guard, as APT had been in talks with Taiwan Mobile about a deal to build and share 5G networks, and extend their 4G spectrum-leasing partnership.
APT is using Taiwan Mobile’s spectrum to deliver 4G roaming services in rural areas. Taiwan Mobile holds a 2.55 percent stake in APT.
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