Taiwan’s Vee Telecom (TIME) is set to acquire a 58% stake in its fellow WiMAX network operator VMAX Telecom, paving the way for a planned merger of the two wireless broadband providers which has the backing of the government, writes local news site Cens.com. The report cited the respective chairmen of Vee and VMAX, Richard Lai and Liu Chao-kai, as confirming that the two companies are in talks for the acquisition and merger procedure. The newspaper also quoted institutional investors who noted that Vee intends to buy a 19% stake in VMAX from Intel Capital and a 39% share in the target company held by Taiwanese mobile operator Vibo Telecom for a total interest of 58%. According to Richard Lai, Vee – based in the south of the country – and VMAX – licensed for northern areas – will continue to operate separately in the initial stage of the merger, following which they will form Taiwan’s first nationwide WiMAX operator, and will also negotiate with the country’s four other WiMAX licensees on further mergers in the future.
In June 2011 Vee Telecom, VMAX, Global Mobile and Tatung InfoComm were reported to be considering merging into two operators, one operating in the northern half of the country and the other in the south, with a view to combining operating resources and saving on infrastructure costs. It was believed that the operators petitioned the National Communications Commission (NCC) to relax rules regarding coverage – a figure of 70% regional coverage was mooted before any kind of merger could take place – in an attempt to avoid unnecessary expenditure.