Foxconn Technology Group has bought a stake of approximately 15 per cent in Asia Pacific Telecom, Taiwan’s fourth-largest mobile operator, for TWD11.6 billion ($390 million), following the vendor’s acquisition of 4G frequencies in the country’s spectrum auction last year.

According to Bloomberg, the stake-building is a precursor to a full takeover of Asia Pacific Telecom by Foxconn, also known as Hon Hai Precision Industry.

The deal is actually being handled by Hon Hai unit Ambit Microsystems, which will buy 583 million new shares in the operator for TWD20 each, a 12 per cent premium to its latest closing price. Ambit might also involve international strategic investors in the deal, the companies said.

Foxconn and Asia Pacific Telecom will negotiate a full merger through a share swap, the two companies said. For the moment, Ambit will have a stake of roughly 15 per cent, according to Asia Pacific Telecom CFO Annie Hung.

Last year, Foxconn paid $312 million for two 4G licences in the lower 700 MHz and 900 MHz bands during the country’s auction.

Asia Pacific Telecom was also among the winners in the contest but otherwise lags its three larger peers.

According to GSMA Intelligence figures, the operator had 2.87 million connections, well behind market leader Chunghwa Telecom with 10.87 million connections as well as Taiwan Mobile with 7.3 million and FarEasTone (7.28 million).

In fact, Asia Pacific Telecom is neck and neck with near rival Vibo Telecom with 2.7 million connections (all figures end-Q1 2014), although the latter failed to win any 4G frequencies in last year’s auction.