The mega-merger of Celcom and Digi has officially been completed according to a joint announcement made by their parent companies, Axiata and Telenor. The move which has been in the works since early 2021, resulted in a merged entity that is officially called Celcom Digi Berhad.
In general, the mega-merger has followed most of the plans that Axiata and Telenor have announced last year. For example, both companies each have equal ownership of 33.1% in Celcom Digi.
Other shareholders of the newly formed entity also include local institutional investors such as Employees Provident Fund (EPF), Permodalan Nasional Berhad (PNB), and Retirement Fund Incorporated (KWAP). Instead of the original RM2.0 billion figure, Axiata received a cash consideration of RM2.5 billion instead which is funded by Digi.
Celcom Digi is also still committed to establishing an Innovation Centre in Kuala Lumpur through an investment of up to RM250 million over a period of five years. The new centre will revolve around digitalization including 4IR digital transformation, IoT, AI, cloud computing, and 5G while at the same time looking into tackling the digital divide in rural areas.
Based on 2021’s financial information, Celcom Digi is going to have a combined customer footprint of around 20 million which generally made them as the largest telco in the country. Despite the completion of the mega-merger, the new entity has yet to address what will happen to the existing Celcom and Digi customers moving forward.
For example, one of the conditions that the Malaysian Communications and Multimedia Commission (MCMC) has set for the merger is that Celcom and Digi’s prepaid as well as postpaid products have to be under a single corporate brand. The regulator has given Celcom Digi two years to put this into action.
In addition to that, MCMC has also asked Celcom Digi to divest Celcom’s Yoodo within the next 18 months via a sales auction process. If the divestment failed, then the company have to cease Yoodo’s operation within three months after the deadline.
Celcom Digi also has to return 70MHz of the spectrum back to MCMC while it also has to ensure that Celcom and Digi’s existing MVNO customers will continue to be served for at least three years from the completion of the merger. Given the huge amount of time that the regulator has provided to the newly merged entity, any changes to Celcom and Digi’s services as well as customer experience most likely will not happen immediately.
Nevertheless, we certainly hope that the new company will address it as soon as possible. At the very least, Celcom Digi should inform its customers of the plan that it has in store for them.