SK Telecom Takes Stake in WiMax Operator

Korean carrier SK Telecom (Nasdaq: SKM) is to invest US$100 million for a 25 percent stake in Malaysian WiMax operator Packet One Networks (Malaysia) Sdn Bhd. (P1) as part of its plan to build a portfolio of wireless broadband service and ICT (information and communication technology) assets in Southeast Asia. (See SK Telecom Invests in P1 and SKT Plans $2.2B Spending Spree.)

P1 is one of a number of dedicated WiMax startups looking to capitalize on the demand for affordable broadband Internet access in developing markets where fixed-line access is limited. It has signed up more than 175,000 business and residential customers since its launch in late 2008 and claims to have generated revenues of nearly $44 million in 2009. (See ITU Day 2: WiMax Brings It.)

The operator recently announced a network expansion plan that will see it reach 65 percent of Malaysians by 2012, from around 45 percent this year, and plans to introduce WiMax-enabled laptop computers during 2010 to boost its market penetration. (See P1 Expands With ZTE and P1 Does WiMax in Malaysia.)

SK Telecom is attracted by the growth potential in Malaysia, a country of about 30 million people where mobile penetration is high (above 100 percent) but broadband penetration currently stands at about 33 percent. WiMax is regarded as the technology that can break the broadband hold of the incumbent carrier, Telekom Malaysia Berhad . (See Telekom Malaysia Faces WiMax Challenge.)

SK Telecom's wireless broadband strategy isn't limited to WiMax, though: The carrier was the first to launch an HSPA+ service in South Korea, plans to support Long Term Evolution (LTE), and has built out a network based on WiBro technology (Korea's version of mobile WiMax) in its domestic market. (See SK Telecom Shows Off HSPA+, AlcaLu, SK Telecom Team Up, and WiBro Operators on Borrowed Time.)

SK Telecom's investment, which values P1 at $400 million, comes at a tricky time for the WiMax community, as service providers, vendors, and analysts try to figure out the technology's role in an LTE world. (See Yota: WiMax + LTE for Russia.)

— Ray Le Maistre, International Managing Editor, Light Reading

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