U Mobile gets two Big Partners

Japanese mobile giant NTT DoCoMo, and South Korea's second biggest mobile operator, KTF, have agreed to take 33% stakes in independent Malaysian 3G operator U Mobile. Between them the two new investors will pay US$200 million for a combined 33% stake in the privately held mobile company. The Malaysian company is currently unlisted and partly owned by local business magnate Vincent Tan.

U Mobile, formerly known as MiTV Networks, won a licence last year to offer third-generation mobile phone services in a controversial government decision. Given its status as a brand new player in the industry, it had been widely predicted that U Mobile would seek at least one ally in the battle to win new customers.

However, the investment could take time to pay off. Malaysia's mobile market, which has recently seen fierce price wars breaking out, is now relatively mature with 78% of the country's population now in possession of a mobile phone .

In December 2006, the country's largest mobile operator DiGi.Com demanded official clarification after learning that the government had spurned its bid for one of the country's 3G licences.

While DiGi.Com was left fuming, the two greenfield players in Malaysia's mobile market, Time dotcom and MiTV Corp Sdn Bhd, walked away with the remaining two 3G spectrum blocks. The government said the decision to choose the two winners was based on commendations from the Malaysian Communications and Multimedia Commission (MCMC) and the Ministry's officials.

U Mobile plans to launch commercial services across Malaysia in the first quarter of 2008 and aims to post annual revenue of 500 billion won (US$543 million) by 2012, KTF said in a statement.