TElenor and Time Dot Com - A Huge Sucking Sound

Time Dot Com today emerged as the main buyer of the Digi.com shares that Telenor placed to the market.

So in addition to getting RM700 million+ for squatting on a 3G Licence, TDC also got a sweet price from CIMB's so called book-building efforts. At Digi.com's closing price of RM24.40 today versus the TDC's purchase price of RM21.50, TDC made a cool RM146 million in a single day.

But wait a minute - how did TDC get credit facility for RM1 billion + to finance the purchase in the first place? Remember, we're talking about a company here that 2 days ago, was not even creditworthy to the tune of a mere RM50 million guarantee to MCMC for its 3G licence.

Something stinks.

Telenor shareholders today heard a huge sucking sound to the tune of RM800 million from their company to TDC (RM650 million for the 3G licence, and RM150 million for its less-than-market price for its shares in Digi.com).

No fault of the Norwegians, it's just that us Malaysians are getting pretty good at fleecing our foreign investors, to our long term detriment as an foreign investment destination.

Google's Android - It's the Right Move

I must say I was a bit surprised by the kind of deflationary tone the internet news sites were taking on the latest announcement by Google of the development of Android, its first foray into the development of a mobile phone operating system. I think tech commentators wanted to see another iPhone and were probably disappointed by the focus on just software. I'm not one of those guys.

I think its probably one of shrewdest moves by Google to enter the mobile market. As commented on this blog previously, I believe that's the best area to create value for the mobile industry today as no one has even come close to developing an ideal mobile phone operating system (and certainly none with the equivalent ubiquity of Windows in the PC environment) . I voted with my wallet by buying my first shares in Google the very same day (at about 8 times the Google IPO price).

What's a little more intriguing though is news that Google will enter the auction for the wireless 700Mhz spectrum to be issued by the FCC. Hmmm, aren't there enough mobile and wimax carriers that can do this job better and more efficiently? Sure, mobile internet and telephony is a sexy business, but what's Google's competitive advantage?

From an ROI and value added perspective, I believe developing an open standards mobile operating system will give Google more bang for the investment buck than being a wireless carrier. Kinda like the success of Microsoft Windows versus the failure of MSN's internet access business (I have a vague recollection that Microsoft started this business after seeing the early success of AOL, but its testament to the total failure of the business that I find it hard to recollect what happened to it!).

Time dot Com - the ultimate rent seeker

This was feedback to the theedgedaily.com report of Digi's offer of issuing 27.5 million shares or so for Timedotcom's 3G spectrum.

Time dot com seems like nothing but a rent seeking company. Its mobile business had to be rescued by Maxis, now its non-existent 3G business which they acquired for RM50 million (have they even paid the licence fees?) is flipped for RM650 million, whilst not meeting a single milestone set by MCMC.

Sigh, at least Digi was smart enough not to acquire the whole company, otherwise they would have to contend with how to get rid of deadwood management and a huge -writedown of non-existent assets (read non-lighted, maybe even non-existent fibre, supposedly in the ground).