KUALA LUMPUR: Axiata Group Bhd's biggest income contributor, Celcom Axiata Bhd, is set to get a boost in its fourth generation Long-Term Evolution (4G-LTE) network coverage following an agreement with Altel Communications Sdn Bhd to share their LTE2600 MHz spectrum.

Under the agreement, Celcom will become the exclusive infrastructure and wholesale provider to Altel, a mobile virtual network operator (MVNO).

In a filing with Bursa Malaysia yesterday, Axiata said Celcom had signed a master collaboration agreement with Altel to collectively develop, establish, build, operate and manage shared infrastructure for their communication services in Malaysia.

However, according to the filing, the agreement will not have any impact on Axiata's earnings for the financial year ending Dec 31, 2013.

"The rationale of this collaboration is to establish a smart alliance that will benefit both Celcom and Altel in achieving their short and long-term business goals … In the proposed collaboration, the parties aim to maximise the usage of the allocated spectrum with the view to provide the best broadband speed in the market," said Axiata.

It said under the agreement, Celcom and Altel will pool each of its 2x10MHz bandwidth of the LTE2600 MHz spectrum awarded by the Malaysian Communications and Multimedia Commission into a common pooled spectrum.

"[The pooled spectrum] is for the exclusive use of both parties for the establishment, deployment, building, construction, operation and maintenance of a wireless business running on or using the LTE technologies," said Axiata.

"In addition to the above, Altel which has been awarded by the MCMC 2x20MHz of the LTE2600 MHz spectrum band will consider a request by Celcom for use of the remaining 2x10MHz spectrum band from Altel."

Telecommunications analysts have said that a 40MHz (20MHz uplink and 20MHz downlink) spectrum is the most optimal block for LTE coverage.

Axiata said Celcom aims to provide the best broadband speed in the market by maximising its given spectra.

This article first appeared in The Edge Financial Daily, on July 5, 2013.