TAN Sri Vincent Tan's exuberance on Tuesday was understandable.

Known in the media industry as a man of few words who rarely takes to the stage, he surprised many guests that day by delivering a speech. He also profusely apologised to Tun Dr Mahathir Mohamad for having woken the former premier to witness the signing of an agreement between his company, U Mobile Sdn Bhd, and Singapore Technologies Telemedia (STT) in Kuala Lumpur.

The live feed was transmitted via video conferencing from London where Dr Mahathir was.

Tan had also surprised many by getting a strategic investor like STT in less than six months. More importantly, the Temasek Holdings subsidiary is committing to invest RM1bil here.

He is selling 33% of U Mobile to STT for RM625mil or RM5 a share. STT will use the balance RM375mil to subscribe to a rights issue undertaken by U Mobile.

Tan and Multi-Purpose Holdings Bhd will also subscribe to the rights issue, an exercise that could raise close to RM1bil.

To STT, U Mobile is a “good fit'' to its operations, now spanning several countries. In Singapore, it controls StarHub, an info-communication company that delivers a full range of information, communications and entertainment services over fixed, cable, mobile and Internet platforms in the republic.

What's next?

U Mobile has a 3G spectrum and over 1,000 3G sites covering the Klang Valley, Seremban, Ipoh and Johor Baru. It now rides on DiGi.Com Bhd's network for 2G domestic roaming.

But to grow market share, it needs to accelerate the 3G network build-up, which would require about RM500mil to RM700mil annually for the next five years. The proceeds from the rights issue should be enough for two years and give it a sizeable network to compete with the incumbents.

Having a strong partner like STT helps, not just in terms of deep pockets but expertise and experience. An analyst suggests that U Mobile leverages on StarHub's expertise for consultancy and advisory services for its network build-up and operations. StarHub's products and services could be replicated here and don't discount rerouting of traffic via StarHub's network.

Should the local players be worried over this tie-up?

Not in the first year. The incumbents are going to make it tough for U Mobile by pushing prices down.

But what analysts would like to see is the entry of more players in triple play - voice, data and video/images all provided in a single access subscription.

The commercial launch of Telekom Malaysia Bhd's (TM) high speed broadband opens new opportunities for triple play for TM, while the alliance of Maxis Communications Bhd and Astro TV is another triple play possibility.

U Mobile is another potential triple play candidate, given that Tan had once owned a TV station via MiTV.

StarHub has a lot of content that if bundled with U Mobile's offering, could well provide U Mobile the perfect avenue to gain market share.

Tan staged a major coup when he got STT to our shores and his exuberance is justified. But the ultimate in this whole deal is video/images and that will be Tan's next game plan.