Decision on P1 stake sale next month

MANY SUITORS: Green Packet to discuss options at board meeting, says key shareholder



GREEN Packet Bhd, the world's third largest vendor of WiMAX devices,
will discuss the possibility of selling its stake in Packet One Networks
(M) Sdn Bhd (P1) at a board meeting next month.

According to a
key shareholder of the company, YTL Corp's Yes mobile and U Mobile, a
company linked to Tan Sri Vincent Tan, and Telekom Malaysia Bhd are
among "a slew of companies" said to be interested in the P1 stake.

Speaking on condition of anonymity, the shareholder told Business Times that a decision will also be made next month.
Green
Packet has a 61 per cent stake in P1, while South Korea's SK Telecom Co
owns some 28.2 per cent stake in the mobile broadband company.

P1 gained traction in the industry in 2008 when it became the first to introduce commercial WiMAX service in the country.

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WiMAX is acronym for Worldwide Interoperability for Microwave Access, a
wireless communications standard designed to provide 30 to 40
megabit-per-second data rates.

It is best described as a standard-based technology, which allows for the delivery of last mile wireless broadband access.
PI has to date pumped in more than RM1.2 billion to build up
infrastructure which has allowed its parent to own some 1,900 base
stations in Malaysia.

According to Green Packet, P1 has some
517,000 subscribers, though industry players noted that the former's
capital expenditure rate of RM1 billion a year over the past five years
has had an impact on the company's balance sheet.

Nevertheless,
Green Packet managed to cut its pre-tax loss in the fourth quarter ended
December 2012 to RM30 million from RM59.6 million in the same quarter a
year ago.

The 2012 results also showed that Green Packet's P1
pillar contributed RM82 million to group revenue and registered a
positive Ebitda (earnings before interest, taxes, depreciation, and
amortisation) of RM7.1 million for the fourth quarter of 2012.

Still, the writing is on the wall that P1 may require a shareholder who is willing to take the company to the next level.

Meanwhile, Green Packet is in the midst of a cost-cutting drive which saw more than 90 staff being laid off in March.

The
layoff came on the back of talk that the company is close to inking an
outsourcing deal with a mainland vendor in order to raise efficiency,
cut costs and boost profit at the Green Packet level.

By Francis Fernandez