Telenor and Axiata in talks to merge telecom business in Asia

Global telecom operators Telenor and Axiata today said they are in talks to merge their telecom business operations in Asia.
Telenor grows in AsiaTelenor will own 56.5 percent and Axiata will own 43.5 percent stake in the merged entity that will have close to 300 million customers in 9 countries.

Telenor had earlier exited from India by selling its telecom business to Airtel, India’s number one telecom operator based on revenue.

Axiata has also started selling its non-viable business by divesting operations in Singapore. Axiata has also exited from Idea Cellular, an Indian telecom operator, when Idea Cellular combined its business with Vodafone Group.

Axiata lost focus?

# Telenor to own 56.5% and Axiata will own 43.5%
# Merged co to headquarter in Malaysia
# 300 million customers in 9 countries
# Celcom to lead Malaysia
# New tower company to become top five mobile infrastructure player

The leading telecom brands of Axiata include Celcom, XL, Smart, Dialog and Ncell in Asia.

Earlier, Telenor has acquired majority stake in DNA, a leading telecom operator in Finland. Telenor had also sold its stake in VEON, a leading telecom operator in Europe. Telenor has current operations in Norway, Sweden and Denmark, in addition to Asia region.

Telenor generates 24 percent of its total revenue from emerging Asia and 31 percent from developing Asia.

A statement from Telenor did not mention about a possible job cut following the merger of two important businesses for both.

Merger details

The merged entity will also become one of Asia’s largest mobile infrastructure companies operating approximately 60,000 towers across Asia. The entity will have its operational headquarters in Kuala Lumpur. It will be listed at an international stock exchange as well as on Bursa Malaysia.

The cost savings will be $5 billion. Pro-forma revenue and pre-synergy EBITDA of the combined entity is $13 billion and $5.5 billion.

“By creating one of Asia’s leading telecom players; with strong regional operations in nine countries and close to 300 million customers, we will combine scale and competence,”  said Sigve Brekke, president and chief executive officer of Telenor Group.

Telenor and Axiata will work towards finalising agreements for the transaction within the third quarter of 2019 following due diligence.

Telenor’s Asian footprint includes Thailand, Malaysia, Bangladesh, Pakistan and Myanmar. Axiata has operating companies in Malaysia, Bangladesh, Cambodia, Nepal, Sri Lanka and Indonesia, and the tower business edotco.

Robi, Axiata’s mobile operations in Bangladesh, will not be part of the merger. Axiata will manage Robi. Celcom and Digi will be part of the merged entity.

The new entity plans to establish the Malaysian Research and Innovation Centre for technologies such as 5G, Internet of Things and Artificial Intelligence.

Baburajan K