MOBILE operator MobileOne (M1) has acquired Internet service provider Qala to jump-start its foray into the broadband business.

The acquisition, for $14.9 million in cash, will 'allow M1 to enter the corporate fixed broadband business quickly by leveraging on the presence and experience of Qala in this market,' said M1's chief executive Karen Kooi.

'We will use this ready platform to derive synergies and further grow the business as a full service operator.'

M1's bigger rivals Singapore Telecommunications and StarHub also offer broadband and pay-TV services, which they bundle in a discounted package to sell consumers. This strategy has allowed them to score customers from M1, Singapore's smallest telco which many analysts see as a one-trick pony since it has only mobile services.

Because of this, M1 has been looking for a way to offer more than mobile. Last August, it struck an agreement to resell StarHub's broadband services, in order to gain experience in offering these services ahead of the completion of Singapore's upcoming next-generation broadband network.

Unlike the current broadband infrastructure owned by SingTel and StarHub, which can decide who use it and how much to charge these users, the new network will be open to all parties at the same price.

The purchase of nine-year-old Qala, which specialises in offering broadband services to business customers, will allow it to get up to speed in the lucrative business broadband market, the company said.

If Qala meets unspecified financial targets between now and Jun 2011, M1 will pay up to $3 million more to the company's shareholders.