Telekom Malaysia is said to be holding talks with Axiata Group – the parent company of Celcom – over a possible merger between the two companies, according to a report by The Star. The move is seen as a way for TM to strengthen its position in the wireless market.
The Star reports that the two companies are already in talks, though nothing is set in stone just yet. Ideally, TM is likely to be most interested in Axiata Group’s cash cow, Celcom, which is one of the top three mobile carriers in Malaysia.
This comes despite TM’s recent majority stake purchase in Packet One Networks (P1) from Green Packet, where it rebranded P1 into webe and rolling out its service gradually over the course of last year.
webe’s consumer postpaid plan is among the cheapest in the country, but despite TM’s aggressive push for its customer base to subscribe to webe, only 2% have subscribed to webe so far.
As such, TM continues to struggle with presence in the wireless space, which has become increasingly competitive – but is potentially more lucrative than the fixed line and broadband market. TM already holds a monopoly 90% market share there, so it only makes sense to branch out into other markets.
Plus,Datuk Seri Shazalli Ramly, the current head of Axiata Group’s Southeast Asia operations and a former CEO of Celcom, has been confirmed to succeed the retiring Tan Sri Zamzamzairani Mohd Isa as the next CEO of TM, effective 1 May 2017.
Any potential TM – Axiata merger by TM is also exacerbated by the fact that mobile carriers such as Maxis have also begun offering home broadband services, eating into TM’s share.
On the other hand, any merger will hugely depend on how much TM would be willing to fork out, considering how beneficial this move will be for TM over Axiata Group.
(Source: The Star)