Time DotCom – to Acquire or be Acquired?

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Jul 23 2007
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It was reported that the loss-making but 3G-awarded Time DotCom Berhad (TIMECOM: stock-code 5031) has been asked by controlling shareholder Khazanah Nasional Bhd to put its third-generation (3G) rollout plan on hold. BusinessTimes also reported that Time had been granted the necessary bank loans and was ready to roll out its 3G infrastructure in March before the “instruction” came in.

“It is basically a shareholder issue. Khazanah is in talks that involve several parties, which may result in changes in the shareholding of Time. So, it is believed that the best solution (for now) is to put the 3G plans on hold,” said a source. By putting the plans on hold, which will satisfy its shareholders and potential new shareholders, Time is said to be at risk of losing its 3G licence.

Could it be that Khazanah, being the major shareholder of Time DotCom with its stake of 30% has other plans in mind as specified by BusinessTimes? If Time indeed has taken the twist to be “sudden” super-efficient in putting the 3G roll-out within project timeliness, then it’ll spawn another interesting speculation – Khazanah is talking with other parties on the possibility of M&A.

Going by the way the government would like it to be, the most likely preferred candidate for Time is with DIGI.com Berhad (DIGI: stock-code 6947), although FinanceTwitter had numerously blogged that the best marriage would be between DIGI.com and Green Packet Berhad (KLSE: GPACKET, stock-code 0082) while Time should just partners with Telekom Malaysia Berhad (KLSE: TM, stock-code 4863).

But then, what Time is lacking is a team of efficient management with experience in marketing and operation as well as driving the company in the right business direction, not to mention the vital people in taking care of dollars and cents. Time has the rest of the chips such as government support, 3G license, inefficient teams, tons of losses and even a bail-out should things turn ugly. You can read how DIGI – If You Can’t Beat Them, Suck the Coffer Dry article, a brilliant plan by the DIGI.com to prevent Time from taking over DIGI.com forcefully – a famous tactic which has been used by government-linked-companies repeatedly in the past.

So I won’t blink my eyes even once out of the worry that Time will risk losing its 3G licence as it always can be extended by a simple government announcement should the period of roll-out not met. For all you know, Time could be still sitting on the 3G licence awarded earlier this year without any plan to even test the workability of the 3G. It shouldn’t surprise you as the 3G was awarded to Time as the bargaining chip to force DIGI.com to acquire Time (or the other way round?) and thus solves Time’s losses once and for all.

One way or another, Time DotCom definitely needs to go if the shareholders (in this particular case Khazanah) do not wish to see more red in the profit-and-loss spreadsheet. Nevertheless the interest on Time stocks will surely attracts punters or speculators.

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