Axiata Group and Telenor Asia are planning to merge the telco operations of Celcom Axiata Berhad (Celcom) and Digi.com Berhad (Digi) into a new Malaysian Digital Champion.
The partners will have equal ownership in the venture estimated at 33.1 percent each. Axiata together with Malaysian institutional funds will own over 51% of the merged company, which will be considered a leading telecommunications service provider in Malaysia in terms of value, revenue and profit, with proforma revenue of about RM12.4 billion, pre-synergy EBITDA of the combined entity at approximately RM5.7 billion, and an estimated 19 million customers. The new company will be named Celcom Digi Berhad and will continue to be listed on Bursa Malaysia.
Chairman of the Axiata Board, Tan Sri Ghazzali Sheikh Abdul Khalid, said: “We are exceedingly pleased to have come this far in discussing the potential merger of our Malaysian operations. The joint creation of a true Malaysian Champion, this merger of Celcom and Digi will see the coming together of the largest mobile operator with the firepower to trigger tremendous opportunities in helping Malaysia leapfrog into the Fourth Industrial Revolution and fulfil our vision of a digitised nation.”
“As Malaysia charges ahead in new areas of 5G, cybersecurity, Artificial Intelligence and Internet-of-Things, the new entity will be positioned to compete amidst uncertainties and challenges in the post-pandemic world. As we face fierce competition from global internet based services and content providers, our stronger strategic position will allow for better negotiation levers in how we choose to compete and cooperate.”
Axiata’s President & Group Chief Executive Officer, Dato’ Izzaddin Idris, said: “It is no secret that the telecommunications industry continues to face long-term structural headwinds of slower growth, increased operating costs and lower profits. On one hand, we see prices of products and services continue to slide while capital expenditure especially on network, quality coverage and advanced technology continue to rise. Against that, data traffic has doubled every year pre-Covid and expected to accelerate even faster in the new norm. Digital aspirations and the ever-increasing demand for connectivity call for significant investments. In order to stay ahead of the curve, we must strengthen the foundation to offer continuous high-quality broadband, improve 4G connectivity and subsequently, support the acceleration of 5G rollout.”
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