Axiata, Telenor to merge Malaysian operations

Axiata and Telenor are close to agreeing a merger of their Malaysian operations, the two companies have announced.

Robert Clark, Contributing Editor, Special to Light Reading

April 8, 2021

3 Min Read
Axiata, Telenor to merge Malaysian operations

Axiata and Telenor are close to agreeing a merger of their Malaysian operations, the two companies have announced.

The combination of Axiata subsidiary Celcom and Telenor's Digi would create Malaysia's largest mobile operator, with proforma revenue of about RM12.4 billion (US$3.0 billion), EBITDA of RM5.7 billion ($1.37 billion) and an estimated 19 million customers.

Axiata said in a statement the two firms were in "advanced discussions" over the merger. Axiata's trading on the Malaysia Bursa was suspended ahead of the announcement.

The deal revisits the attempted $13 billion merger between Axiata and Telenor's Asian operations in 2019, abandoned because of Indonesian opposition and Malaysian sensitivities over ceding control to the Norwegian firm.

Coming together

The new entity is structured to grant more than 51% ownership to Axiata and its Malaysian institutional shareholders, as well as the right to nominate the initial chairman and CEO, Axiata said.

The two companies will each own 33.1% of the merged company, to be known as Celcom Digi Berhad, which will continue to be listed on the local exchange.

Axiata said the combined scale, competencies, finance and experience of the two operators would "generate significant synergistic value" and a more resilient telco.

The new operator would be well-positioned to take advantage of the surge in digital services, while better managing the challenges of a highly competitive environment, Axiata said.

Axiata group CEO Datuk Izzaddin Idris told a briefing Thursday afternoon that Telenor and Axiata had no further plans to merge their regional businesses, Edge Markets reported.

He said the deal was primarily focused on consolidating and future-proofing the businesses in Malaysia.

Earlier, Idris said the industry faced long-term structural challenges of slower growth and higher operating costs.

"Digital aspirations and the ever-increasing demand for connectivity call for significant investments," he said.

"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."

Government intervention

The merger follows the launch of the government's MyDigital program in February, which anticipates around RM50 billion ($12 billion) investment in next-gen broadband, cloud and 5G in the next decade.

It also comes as the government is fast-tracking its 5G plan, with launch expected as early as the end of 2021.

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

"The new entity will have the size and financial capabilities to support Malaysia's digital aspirations and lead industry development in a connected society," said Jørgen C Arentz Rostrup, head of Telenor Asia and vice-chairman of the new company.

In Telenor's 2020 filing, Digi reported full-year EBITDA of RM2.9 billion ($700 million), 10.4 million subs and Q4 ARPU of RM41.6 ($10.05).

Celcom last year recorded RM6.2 billion ($1.45 billion) in revenue and RM2.58 billion ($623 million) in EBITDA, Axiata said.

The companies said they aimed to finalize the deal within the second quarter of 2021.

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— Robert Clark, contributing editor, special to Light Reading

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech ( 

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