U Mobile to bag new partner

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KUCHING: U Mobile Sdn Bhd’s (U Mobile) plan to accelerate its 3G network rollout and give its customers better service experience may be realized as Singapore Technologies Telemedia Pte Ltd (STT) is to acquire a 33 per cent stake in U Mobile.

2497ECM Libra Capital Sdn Bhd (ECM Libra) in its research report stated that this deal should benefit U Mobile by leveraging on the expertise of its new partner, which owned Singapore’s number two mobile operator, Starhub Ltd.

In recapping, the research house highlighted that STT was said to invest RM1 billion via the acquisition of a 33 per cent stake in U Mobile from Tan Sri Vincent Tan’s U Television Sdn Bhd (U TV) and the subscription of new shares via rights issue.

Post the rights issue, STT would own 33 per cent of the enlarged share base. The research firm pointed out that STT saw some intrinsic value in U Mobile if it was willing to pay more than U Mobile’s previous partners for the same shareholdings.

But it was not very clear how U Mobile’s operations had grown since KT Freetel and NTT Docomo exited in third quarter of calendar year 2009, whereby Tan Sri Vincent Tan had to pay back RM662 million to both parties which held a combined stake of 33 per cent.

However, the research house expressed wariness on the prospect of U Mobile due to the maturity of the mobile market, adding that U Mobile remained very much behind the curve with a 3G network that only covered the Klang Valley.

Besides that, competition would further intensified with the impending entry of YTL Communications Sdn Bhd by year-end with its mobile Internet, which was expected to also offer voice through its WiMAX services.