Foxconn to secure stake in Taiwanese operator to bolster 4G offering

Apple supplier Foxconn is planning to secure a $390 million stake in Asia Pacific Telecom as the manufacturer branches out in to 4G communications.

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Credit: Liu Jiayi/ ZDNet

Hon Hai Precision Industry, also known as Foxconn, plans to buy a stake in Taiwanese mobile telecoms operator Asia Pacific Telecom in order to strengthen its position within the 4G telecoms industry.

The manufacturer, which supplies Apple with components for its iPhone and iPad mobile devices, is planning to shake hands on a deal with Asia Pacific worth T$11.6 billion ($390 million). In a private placement, Foxconn will spend T$20 a share for 582.9 million shares in the telecommunications firm — roughly ownership of 15 percent — according to stock exchange filings. As noted by Reuters, Asia Pacific and a unit of Foxconn, Ambit Microsystems, are expected to merge through a share swap. If the deal goes ahead, Ambit will be dissolved and the merged businesses will operate under Asia Pacific Telecom.

The deal comes as Foxconn branches out to industries beyond manufacturing, in the hopes of doubling its annual revenue over the next 10 years. E-commerce, 4G and cloud technology are all areas of exploration for the manufacturer, in addition to efforts focused on the US market. Foxconn Chairman Terry Gou has previously said that "automation, software and technology innovation will be our key focus in the US in the coming few years."

In April, reports suggested that Foxconn was in talks with equity firm MBK Partners to potentially buy a controlling stake in the largest cable provider in Taiwan, China Network Systems (CNS). It was suggested that Foxconn wished to team up with CNS in order to compete with Chunghwa Telecom by offering 4G network packages to Taiwanese consumers.

Foxconn has purchased spectrum licenses for the 700-MHz and 900-MHz bands following a spectrum auction launched by the Taiwanese government.