Green Packet Bhd, the country’s largest WiMAX (Worldwide Interoperability for Microwave Access) operator and the world’s third largest WiMAX modem producer, believes its strategic alliance with South Korea’s SK Telecom via its subsidiary Packet One Networks (M) Sdn Bhd (P1), will accelerate its business plans by tapping the Korean company’s vast experience in the WiMAX business.

Green Packet group managing director and chief executive officer C.C. Puan says his company and SK Telecom decided on the tie-up because both companies have the same ambition and similar business culture that could be adopted.

“When we are choosing partners, we are not just looking for those who can offer funds for our business, but also partners that can share their experience with us.

“Since 18 months ago, we have been searching for the right partner and for the last six months, we have been talking and discussing with SK Telecom before finally forging the alliance,” he tells StarBizWeek.

WiMAX is a standard-based technology enabling delivery of last-mile wireless broadband access as an alternative to cable and DSL (digital subscriber line).

On Tuesday, both companies signed a formal strategic alliance agreement which SK Telecom acquires a 25.8% stake in P1 for US$100mil cash, making it P1’s second largest shareholder after Green Packet.

SK Telecom’s investment will be used to continue P1’s nationwide WiMAX rollout over the next two to three years, to accelerate and expand its customer base and for general corporate purposes.

Apart from that, SK Telecom plans to make available to P1 its technology and network expertise as well as its customer products portfolio, helping P1 achieve its goals of having a robust, high-performance network and improving its customer service.

Through this alliance too, P1 would have access to SK Telecom’s network and operational management experience and its global procurement resources allowing it to further enhance its operational and financial performance.

Acccording to a HwangDBS Vicker Research report, the acquisition of stake in P1 by SK Telecom will dilute Green Packet’s stake to 57% from 75%.

It also points out that Intel Corp’s effective interest in P1 is reduced to 5% from the previous 7%.

Says Puan: “SK Telecom is Korea’s leading telecommunications provider, with more than 25 million subscribers, which accounts for more than 50% of the total market share in that country.

“It has vast experience of more than 20 years in the business and in handling such a huge amount of customers. These are the things that we look for when we chose them.”

He adds that South Korea is the leading example of a country rising from a low-level of ICT (information and communication technologies) access to one of the highest in the world.

It represented an impressive and relevant case study on how a nation can be transformed through broadband technology with one of the highest personal computer and broadband penetration rates and the fastest connectivity in the world.

Through this alliance, he contends, Malaysia as a nation can draw from this experience in pursuing its own broadband penetration goals.

P1 chief executive officer Michael Lai says P1 wants to improve its service significantly.

He admits that the company is not fast enough in catering to the great demand in the market, and adds that having SK Telecom on board will help in this matter.

Asked about the market penetration and subscription level, Puan says P1 currently has 175,000 subscribers and aims to have about 50% coverage in Peninsular Malaysia by the end of the year.

“We have captured a substantial share of subscribers since the end of last year after our successful ‘Potong’ campaign. What we are doing this year is to improve our network and coverage.

“For the first half of the year, we have invested about RM50mil each for our network and coverage upgrading,” he says, adding that for the next six months, the company plans to invest another RM100mil to RM150mil in these areas.