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Barring a last minute switch in plans, Malaysia could soon see the birth of a new telco behemoth. Various news outlets have stated that a merger between Celcom and Digi – two of the nation’s biggest telecommunications service providers – will soon take place.
This merger follows strong rumours that revealed ongoing discussions between parent companies Axiata Group and Telenor Asia to combine their subsidiaries into a single entity, with talks already at an “advanced stage”.
Celcom’s parent company Axiata Group Berhad, which now serves multiple emerging markets in Asia, was previously a company under the purview of Telekom Malaysia – the country’s largest provider of broadband services as well as other fixed-line network products.
Digi’s parent company Telenor Asia, on the other hand, is owned by Norwegian conglomerate Telenor – one of the largest telecommunications providers in the world with a focus on Scandinavia and Asia.
The move will see Celcom parent Axiata, alongside other Malaysian institutions, owning 51 percent of the new entity, while Telenor Asia will own a 33.1 percent share.
As part of the merger, Axiata said in a statement that it will look to receive newly-issued shares in Digi amounting to 33.1 percent in post-transactional shares, which will be valued at USD483.6 million (RM2 billion). A large portion of the sum will come from Digi as new debt while the balance will come from Telenor Asia.
“Both parties will work towards finalising agreements in relation to the proposed transaction within the second quarter of 2021,” the company stated. “The transaction will be subject to approval by Celcom and Digi shareholders, receipt of regulatory approvals and other customary terms and conditions.”
Bigger, yes. Better? We’ll see.
The combining of two of Malaysia’s largest telecommunications service providers should result in a probable new market leader for the foreseeable future, with the new entity – to be referred to as Celcom Digi Berhad – set to boast a 19-million-strong consumer base – the largest in Malaysia.
If the official press statement is anything to go by, the aim of the merger will be to form a “leading Malaysian telco” with grand plans to utilize its newly-combined resources to support the country’s bid to achieve 5G competency and take advantage of other opportunities for telecommunications advancement.
“Where connectivity is a critical digitalization enabler, the telco industry will play an integral role in supporting the government’s decision to fast-track 5G services and deliver ubiquitous high quality broadband speed and services,” said the press release. “This will bode well for customers as a move that would reap benefits for the economy and industry.”
IMAGE: Free Malaysia Today
While the PR spiel outlines plenty of positives for Malaysian consumers, it’s likely that there will be some concerns regarding the probably downsides caused by the emergence of a telco behemoth.
Historically, Malaysian service providers have known to be notorious for offering subpar service quality and being technological laggards when compared with telcos from neighboring countries.
In July 2020, it was revealed that no less than five Malaysian telcos including Maxis, Digi, and Celcom had been hit with a whopping US$1.1 million (RM4.6 million) in fines simply for offering services that were below the acceptable standards outlined by the Malaysia Communications and Multimedia Commission (MCMC).
With there now being even less competition at the top, Malaysian consumers could soon feel their concerns regarding poor network quality and customer service justified.
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ที่มา : Mashable