AMID talks that Axiata Group Bhd and Telenor ASA may merge, Umno urged the authorities to study the matter thoroughly before allowing the collaboration to take place.
“Celcom Digi Bhd, an entity formed through the merger, will become the largest telecommunication service provider in the country.
“But the question on the compliance of anti-competition laws should be considered carefully and thoroughly.
“The merger of companies for the sake of multiplied profits must be balanced with promotion of healthy competition within the not-so-big Malaysian market,” its deputy president Datuk Seri Mohamad Hasan said, in a Facebook post.
Last week, Axiata and Telenor announced that they were in “advanced talks” on the possibility of merging both the telco giants.
“Axiata together with Malaysian institutional funds, will own over 51% of the MergeCo. As part of the merger transaction, Axiata will receive newly issued shares in Digi representing 33.1% post-transaction shareholding and cash equalisation amounting about RM2 bil, of which RM1.7 bil to come from Digi as new debt, balance of RM300 mil from Telenor,” Axiata was reported saying.
Former Prime Minister Datuk Seri Najib Tun Razak had also raised concerns over the planned merger, saying it should be probed by the Malaysia Competition Commission (MyCC).
Touching on the matter, Mohamad Hasan said that the proposed deal must include how consumers will be protected against the negative impacts of this merger.
Healthy competition, market liberalisation
“At a time when competition is getting more aggressive but costs of telecommunication services are not declining, the Government must seek explanation from Celcom Digi on how this merger can benefit consumers and improve the competitiveness of telecommunication industry as a whole,” he opined.
The Rantau state assemblyman said that while Malaysia should have a global-centric telecommunication company which can explore potentials for cross-border services, the Celcom Digi plan does not seem to fit that purpose.
“We’re still talking about the Malaysian market, which is only moderately large. Hence, all this calls for an extensive assessment by the Government on the benefits of this merger for consumers, national importance, the dynamics of the telecommunication industry and its compliance of a healthy competition ecosystem,” he added.
Mohamad Hasan stated that Malaysia needs a player that prioritises the benefits and needs of consumers in the era of “Internet for Everything”.
“And for this to happen, a healthy competition should be supervised diligently, with market liberalisation considered.
“And having a gigantic telecommunication corporation may not be the only best path to achieve that purpose,” Mohamad Hasan remarked. – April 15, 2021
