Telenor ASA and Axiata Group Bhd’s talks about merging their Asian telecommunication operation will be bad for Maxis Bhd, analysts and industry officials said.
They also said the potential merger would help create economies of scale in markets where competition is intensifying.
They pointed to rising cost of operations with higher capital expenditure (capex) spend on network, quality coverage and updated technology.
The Axiata-Telenor talks announced on Monday will likely see the merger of Celcom Axiata Bhd and Digi.Com Bhd. Telenor owns a 49 per cent stake in DiGi.
Public Investment Bank Bhd (PublicInvest) believes the merger prospect would be positive to DiGi as it would be acquiring Celcom and become the largest mobile player in Malaysia.
Subsequently, PublicInvest upgraded DiGi to “buy” and maintained its “neutral” call on Axiata.
The firm said a Celcom-Digi merger would be negative to Maxis as the merged unit would overtake the latter to become the leader in Malaysia’s mobile segment.
PublicInvest maintained its “underperform” call on Maxis.
https://www.nst.com.my/business/2019/05/486543/planned-merger-bad-maxis