Foxconn devours $390m stake in Taiwanese 4G mobe network
Tasty slice of mobile broadband market ahead of planned slurp
Apple supplier Foxconn is planning to buy a stake in Taiwanese mobile operator Asia Pacific Telecom for $390m to gobble up more of the country’s early 4G market.
Foxconn, which is listed on the Taiwan stock exchange as Hon Hai Precision Industry, said in a filing with the market that its subsidiary Ambit Microsystems would pay $0.66 per share for just under 583 million stocks in the telco. The plan is for Ambit and Asia Pacific to then merge fully via a share swap by the end of June.
Foxconn already has a licence for a part of Taiwan’s 4G spectrum and was planning to deploy its network through Ambit. However, if this deal goes ahead, the Ambit name will be discarded and it will operate its new network through Asia Pacific Telecom.
The exact swap ratio for the merger deal will be calculated based on Ambit’s book value per share and the 20-day average stock price ahead of the agreement for Asia Pacific, or a price of $0.66 a share if the average price fell below that, according to the filing.
“This condition is under the assumption that there is no significant difference between the results of Ambit's due diligence on APT, as well as APT's actual operations,” the firm said.
Asia Pacific’s 10MHz block of spectrum will add to Foxconn’s 20MHz to give it a much better chance of competing in the market. Taiwan’s biggest mobile operator Chunghwa Telecom is said to have around 35MHz of bandwidth, while Far EasTone and Taiwan Mobile Company hold 30MHz each.
Beancounters at IDC said last year that they expected around 600,000 subscribers to initially switch from 3G to 4G when providers start offering the service, jumping to around 8.1 million users by 2015. Chunghwa Telecom is expected to become the first carrier to start services in the second half of this year. ®