Malaysian telcos Celcom and DiGi approve merger agreement

Celcom DiGi will become Malaysia’s largest telco with over 20 million subscribers

The proposed merger between Malaysian operators Celcom Axiata and DiGi Malaysia merger is now a step closer, after the boards of both companies gave their approval for the agreement.

Once the two companies are fully merged, the new entity will be the largest carrier in Malaysia, with over 20 million subscribers.

Market leader Maxis currently has nearly 12 million mobile subscribers.

According to local press reports, the merger agreement is expected to be fully completed by the end of the year. Under the terms of the deal, Axiata and Telenor will each own 33.1% stakes in the new company, which will be known as Celcom DiGi.

The current mobile operators in the country are Celcom Axiata, DiGi, Maxis, Telekom Malaysia, YTL Communications and U Mobile.

Malaysia’s six major telecom operators- Maxis, U Mobile, Celcom Axiata, Digi Telecommunications, YTL Communications, and Telekom Malaysia, recently signed access agreements with state-run wholesale 5G network operator Digital Nasional Berhad (DNB).

DNB is a special-purpose vehicle set up by the Malaysian government with the main goal of deploying and managing Malaysia’s 5G network.

According to DNB, 5G coverage in Malaysia has already reached over 30% of populated areas and is on track to achieve the 80% target set by the government by 2024.

DNB had previously confirmed that it had already executed share subscription agreements with four Malaysian telcos – Celcom, Digi, YTL, and Telekom Malaysia – which will collectively take up a 65% stake in the state-run firm.

Celcom and Digi will each take up a 12.5% stake, while YTL and Telekom Malaysia will own a 20% stake each. The government, via the Ministry of Finance, will retain a 35% stake.

DNB previously said that the entire 5G network rollout is expected to cost RM 16.5 billion ($3.54 billion) over the next 10 years. This is made up of RM 12.5 billion for the 5G network equipment and infrastructure as well as RM 4 billion in corporate costs.

The company also said that the implementation of 5G technology will have a positive impact of RM150 billion in the country’s GDP and will create 750,000 jobs.

Swedish vendor Ericsson is in charge of the deployment of Malaysian national 5G network. Ericsson recently announced that DNB had selected the vendor’s new energy-saving radios.