Axiata-Telenor to create mega-telco through merger

The merger announcement was made by Axiata President and Group CEO, Tan Sri Jamaludin Ibrahim.

The merger comes at a time when Axiata had just posted one of its biggest losses in its history. With the latest losses, it makes it increasingly challenging for the telco to continue on its growth trajectory as more investment is needed by the firm as it prepares itself for 5G growth.

Jamaludin, however, is optimistic about the prospects of the company, post-merger.

"I am proud how far we have come as a Regional Champion and look forward to the next phase of our journey.

"We are on the verge of making history! This proposed mega merger would create a Global Champion," he says.

The merger will create three discussion points for regulators and consumers alike to ponder.

The first is on being a global company in the telecommunications industry. This may spawn off anti-trust concerns particularly in Malaysia when the result of this merger would create a Axiata/Telenor vs Maxis scenario.

The second is on the largest telco company in Malaysia, following the merger of Celcom (a subsidiary of Axiata) with Digi (a subsidiary of Telenor). This would pose great leverage against the market that would be of interest for many regulators to come.

Third, is the enlarged piece of Axiatas tower company, Edotco. Currently, Edotco is already the 13th largest tower company globally. A post-merger scenario would mean Edotco will become the fifth largest tower company in the world.

However, not everyone is thrilled following this merger.

Opposition MP Khairy Jamaluddin says that anti-competition laws must be put in place following this merger.

"This is something (that the) Malaysian Communications and Multimedia Commission (MCMC) and the Anti-Competition body (MyCC) should look into.

"Now telco essentially is a duopoly in Malaysia (excluding MVNOs)," he said.

The companies are currently in talks with regulators to make this merger a reality. Through a statement, Axiata says they will list the new merged company on Bursa Malaysia, and also on another international exchange in due time. It did not specify where this international exchange would be.