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Telekom Malaysia Aims for Mobile Unit Listing by End-April
25 Mar 08
Telekom Malaysia expects to list its domestic and international mobile services unit by the end of April; the group has yet to shortlist potential strategic partners for the unit.
Global Insight Perspective | | Significance | Telecom Malaysia plans to list its mobile unit by the end of April. | Implications | The proposed listing would help fund growth of the group's existing mobile operations and future acquisitions. | Outlook | Telekom Malaysia has yet to select partners for the mobile unit; its choice will largely depend on who it considers a competent growth partner and how much stake it is prepared to give up. |
Telekom Malaysia (TM) expects to complete the split of its fixed-line and mobile businesses into separate listed entities by 17 April, said Chief Executive Abdul Wahid Omar. The listing of the mobile unit, barring unforeseen circumstances, will happen by the end of April, Abdul Wahid said, adding the group has yet to shortlist potential foreign strategic partners for the mobile unit. An extraordinary general meeting is scheduled to be held on 17 April. In a move to accelerate growth in both mobile and fixed segments through clearer strategic focus, TM, in September 2007, unveiled plans to de-merge its fixed and mobile units to create two new units, RegionCo and FixedCo. RegionCo will include the group's regional mobile operations under TM International, and domestic mobile operation under Celcom, while FixedCo will retain the listed TM's domestic interests in fixed-line voice, data and broadband, and other non-telecommunications-related services under TM Ventures. The countries in which RegionCo has a significant presence are as follows: Telekom Malaysia's Mobile Operations | Services | Country | Operating Company | Mobile Telecommunication Services | Malaysia | Celcom | Indonesia | PT Excelcomindo | Sri Lanka | Dialog | Bangladesh | TM International (Bangladesh) Limited (TMIB) | Singapore | MobileOne | India | Spice Communications | Cambodia | Telekom Malaysia International (Cambodia) Company Limited | Iran | Mobile Telecommunications Company of Isfahan | Non-Mobile Telecommunication Services | Pakistan | Multinet Pakistan (Private) Limited* | Thailand | - Samart Corporation Public Company Limited†
- Samart I-Mobile Public Company Limited† | Source: TM
* Provision of fibre-optic network services and broadband services.
† Design, implementation and installation of telecommunication systems and distribution of telecommunication equipments. |
Outlook and Implications TM is splitting its businesses in order to attract increased investor interest to its emerging markets mobile businesses, which has great growth potential, with presence in Bangladesh, Cambodia, India, Indonesia, Iran, Singapore and Sri Lanka. The group is also eyeing mobile assets in Laos, Myanmar and Vietnam. The capital raised through the proposed listing would help fund network expansion of the existing operations and future acquisitions to further expand its international footprint. However, it remains to be seen how effectively its fixed-line assets operate as an independent unit in the face of competition and growing fixed-to-mobile substitution. With mobile assets in several high-growth emerging markets, the soon-to-be-spun-off mobile unit would represent an interesting investment opportunity for strategic investors. Several leading Western European companies have been mooted as potential partners. Some leading Middle Eastern telcos, which are increasingly investing abroad, could also be interested. Although TM has not short-listed any partners for its offshore mobile unit, its eventual choice, if any, would largely depend on two issues: who it considers a desirable partner for growth and what proportion of the new unit it accepts to sell. Whether investors would be willing to settle for a minority interest and the problem of over-lapping presence for telcos who already have interests in some of TM's regional markets could create some hurdles in reaching the deal eventually.
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