Axiata, Telenor win approval to form Malaysia's top mobile operator (updated)

Digi Communications

29/06/2022 03:52

(Recasts with details from statement, quote and share price)
    KUALA LUMPUR, June 29 (Reuters) - Malaysia's communications
regulator on Wednesday approved a merger between the mobile
operations of Axiata Group Bhd  AXIA.KL  and Norway's Telenor
ASA  TEL.OL , in a deal that will form the Southeast Asian
country's biggest player in the sector.
    Telenor's Digi.Com Berhad  DSOM.KL  and Celcom Axiata Berhad
are Malaysia's second- and third-largest mobile service
operators, respectively, and the tie-up will create the
country's top mobile service operator, the Malaysian
Communications and Multimedia Commission (MCMC) said in a
statement.
    MCMC said it has issued a notice of no objection after the
companies submitted a set of undertakings to address competition
issues that may arise from the merger.
    In a joint statement, Digi.Com and Celcom said undertakings
included divestment of 70 MHz of their spectrum and Celcom's
"Yoodo" brand. In addition, they agreed to establish a separate
independent business unit for their mobile virtual network
operators' (MVNO) wholesale business, and position existing
products under a single corporate brand.
   When the merger was announced last year, it was estimated the
 new Celcom Digi Berhad would create a company with annual
revenue of around $3 billion and core profitability of $1.4
billion from a subscriber base of about 19 million customers.
Digi.Com had a market value of around $6 billion.  urn:newsml:reuters.com:*:nL1N2M1060
    Maxis Bhd is currently Malaysia's top mobile services
provider with more than 9.4 million revenue-generating
subscribers.
    The companies expect the merger to be completed in the
second half of 2022, with Axiata and Telenor holding equal
ownership of 33.1% each. 
    It will now be subject to the approval of the Securities
Commission, Bursa Malaysia, and shareholders, the companies
said.
    "Today brings us a step closer to creating a strong
Malaysian company with the combined scale, experience, network,
and innovation leadership to drive Malaysia's digital growth in
the coming years," said Haakon Bruaset Kjoel, Digi.Com's chair
of the board of directors.
    The companies would be well-placed to drive 5G solutions,
the statement said. Malaysia plans to roll out the 5G
telecommunications spectrum in stages and has set up a special
purpose vehicle, Digital Nasional Berhad, to oversee
infrastructure and network deployment.
    Digi.Com shares rose as high as 7.7% when trading in the
stock resumed. Axiata's shares climbed as high as 2.85%.

 (Reporting by Mei Mei Chu
Editing by Ed Dsvies)
 ((meifong.chu@thomsonreuters.com; +603-2333-8005; Reuters
Messaging: @meixchu on Twitter))