It has entered into a 4G/LTE network collaboration and partnership agreement with members from two local telcos consortiums.
It has entered into an arrangement with the individual companies rather than the consortium. They are planning to make announcement once the MCMC finalises the positioning of each spectrum.
The two consortiums are the partnership of Maxis and U Mobile and the tie up between DIGI and Celcom Axiata.
A source explains that the rational for Redtone to enter into such an agreement was to raise capital to fund the eventual rollout of its own 4G/LTE network.
A substantial amount of capital expenditure is needed to build up a network. Redtone would be able to leverage on the 200MHz 4G/LTE bandwidth allotted to it in order to raise funding for eventual rollout.
Given its relatively small sized compared with other players, funding may have eventually proved to be an issue for Redtone.
The company is currently in the red, chalking up a net loss of rm870000 for its first quarter ended Aug 31, 2011. However in terms of cash flow, net cash generated from operating activities stood at rm2.2 million.
The company also has some well connected shareholders. In Oct 2011, Cheras UMNO division chairman Datuk Wira Syed Ali has emerged as the largest shareholder with an indirect stake of 28.6%. He is also Redtone’s deputy chairman.
The network sharing was one of the guidelines laid down by MCMC when the commission awarded the licenses early Dec 2011.
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