Monday, 22 July 2013

DiGi business trust decision by year-end

SHAH ALAM: DiGi.Com Bhd will decide by year-end whether to proceed with the setting up a business trust, according to its chief executive officer, Henrik Clausen (pic).

“It’s a relatively new framework in Malaysia and we need to understand the implications of setting up a business trust, what are the true benefits are and what are some of the limitations that could be created if we implement it,” he told StarBiz.

The telecommunication services provider said in April this year that it was exploring the option of setting up a business trust as a potential vehicle for its capital management initiatives.

This is so to increase capital efficiency and return excess cash to shareholders.

The Securities Commission (SC) had in January released guidelines for business trusts, in a move to further widen asset classes.

Business trusts are similar to real estate investment trusts in structure. It is akin to a company operating like a business enterprise even though it is not a separate legal entity.

On another note, Clausen said the company was open to partnerships in sharing infrastructure for its 4G rollout.

It has for years been trying to secure more of the 900Mhz spectrum as it continues to build its next generation network which will be LTE enabled.

It wants the GSM 900 megahertz (MHz) spectrum so that it can reach out to a wider segment of the population.

It is currently sharing base station sites with Celcom Axiata Bhd but is exploring ways to work with others, as there is an indirect push by the regulator for operators to work together to avoid duplicate networks and wasteful resources.

“We are flexible and have interest to share as it makes logical sense to share especially with LTE,” said Clausen.

By giving only 20Mhz of 2.6Ghz spectrum to most of the telco players, the Government is encouraging the concept of sharing. DiGi has completed about 1,000km of joint fibre optics built with Celcom Axiata.

Meanwhile, Maxis signed an infrastructure and spectrum sharing agreement with REDTone International Bhd. Maxis also has another tie-up with U Mobile Sdn Bhd to share 3G and 4G networks.

Clausen encourages sharing of infrastructure and likes to see it happen more.

“There’s a push for that, and we understand the reason behind that. It doesn’t make sense for us to build our own sites, own fibres,” he said.

DiGi was investing RM650mil to roll out LTE over the next few years, he added.

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