MERGERS AND ACQUISITIONS

Mergers and Acquisitions



Mergers and Acquisitions

Charts

Source: Malaysian Communications and Multimedia Commission (MCMC)

Mobile phones are the favorite means of communication for Malaysians. The segment grew exponentially with the wider subscriber base, increase population that is using mobile data and multimedia services and higher international calls. The number of mobile phone subscriber was 19.5 million at the end of 2006 which rose to 23.4 million in 2007 and came to 27.71 million at the end of 2008. These were the highest rates of penetration in mobile phone subscriptions in Asia. At the end of 2008, penetration rate mounted to 98.9% and in 2099, 102.4%. This was the reason that the penetration rate in land line decreased from 65% in 2001 to 44% in 2009. Text message business which is a part of mobile data is still booming with a growth rate of 6%. SMS traffic is increasing exponentially with 32 billion in 2006, 57billion in 2007 and reached 73 billion in 2008.

As Celcom is taken over by Telekom Malaysia and TimeCel is taken over by Maxis, the number of competitor decreased in the country as sector consolidated from 8 companies to just 3 companies. Telekom Malaysia (TM) separated its fixed line and cellular operations in 2008. TM transferred its mobile operations and non Malaysian business to a new entity called TM International (TMI) which then renamed as AXIATA. At the start of 2009, the mobile phone subscribers in Malaysia were 27.1 million in the population of 28.02 million with a market share of 39.9% with Maxis Time Cel, 34.4% with the TM Celcom and 25.7% with Digi Com (Market Watch, 2010, pp. 5)

Celcom merged with Telekom Malaysia and became a part of Telekom Malaysia International. The company then renamed as Axiata that include many international telecommunication business. The operating revenue of Axiata in 2010 was RM 15.6 billion. The revenue is divided into 10 telecom business around the continent. Celcom is the major contributor in the revenue with 43.6%. Celcom is the most experiences telecommunication company of Malaysia with around 11 million customers. It has a strong network covering 94.9% of population. Celcom witnessed a revenue growth of 8% year over a year from RM 6.3 billion to RM 6.8 billion in 2010. Celcom, through its premium quality and customer focused strategies, led to a subscriber growth of 10% in the end of 2010 (Axiata Group, 2011, p. 28)

Other companies that contributed to the operating revenue were XL, one of the leading telecom service providers of Indonesia; Dialog from Srilanka, that contributed 7.6% in the operating revenue of Axiata; Robi, a joint venture between Axiata Group and NTT DOCOMO Inc, Japan, formerly known as TM International Bangladesh with operations since 1997 under the name of Aktel; Hello, a Cambodia's telecom company that contributed to 0.8% of total Axiata operating revenue; others, contributing 0.7%, including Idea from India, M1 from Singapore, Multinet from Pakistan, MTCE from Islamic Republic of Iran, and Samart I-Mobile from ...