KUALA LUMPUR--Intel Capital announced Monday it is investing 50 million ringgit (US$15.4 million) in local telecommunications player Green Packet through the Malaysian company's fully-owned subsidiary, Packet One Networks (P1).
The deal, inked in the form of convertible bonds, effectively gives Intel Capital a 6.32 percent minority stake in Green Packet. Intel Capital is the investment arm of chipmaker Intel.
Sudheer Kuppam, managing director of Intel Capital Southeast Asia, India and Japan, said the deal, to date, represents Intel Capital's largest funding for WiMax technology in a Malaysian company, and the second largest in Asia after another investment made in Japan late last year.
"This investment will allow Intel a strong engagement on the commercial side of the business, and Intel will help Green Packet [via Packet One] roll out its WiMax service," he said at a media conference on the sidelines of the World Congress on IT (WCIT). Held this week at the Kuala Lumpur City Center (KLCC) Convention Center, the WCIT is a global information and communications technology (ICT) gathering for global leaders in business, government and academia.
Intel Capital last month said it would be concentrating a large portion of its investment initiatives on the mobility space, including WiMax.
Asked if 50 million ringgit was considerably small compared to the overall investment needed to roll out WiMax in Malaysia, Sudheer said: "This deal is not a one-time investment.
"As the relationship progresses, and as Green Packet demonstrates success [in rolling out its WiMax service], we will prolong and extend this relationship so that Malaysia will be able to realize its wireless broadband dream," he said.
Sudheer also noted that Intel will help deploy P1's IEEE 802.11e-based WiMax wireless broadband, scheduled to be available next month.
Asked if Intel Capital had plans to invest in other WiMax players in the region, Sudheer declined to give any specific plans, noting that "the public can expect to see two more funding deals in Southeast Asia by year-end."
C.C. Puan, Green Packet's group managing director, said the Intel Capital investment represents a significant milestone for the Malaysian company.
"The investment will help us prime WiMax to play a greater role in supporting the government's aspiration in achieving the target specified in Malaysia's National Broadband Plan (NBP)," Puan said. The NBP aims to achieve 50 percent broadband penetration for the country by 2010.
Puan also noted that P1 is on target to provide WiMax network coverage to 25 percent of the population by end-2008. "This year, we will spend about 350 million ringgit (US$107.9 million) alone on our WiMax roll-out to achieve this [target]," he said.
Edwin Yapp is a freelance IT writer based in Malaysia.