Malaysia’s local telco industry needs consolidation

Celcom Axiata Bhd CEO Michael Kuehner, while welcoming the expected entry of a new player in the local telco scene next week, pointed out that what the industry needs is consolidation and not another player.

Yodoo is expected to launch its mobile data plan next Tuesday.

“The market has too many (telcos) than too few. Customers have ample choice in Malaysia, from all price range, from all types of network experience, there is enough to choose from. There is no need for another one coming in.

“No worries about competition. Very happy with competition. We’re strong enough to stay in competition and be successful. Of course there is always the element of competition when it comes to pricing, which possibly has an impact on revenue, but it’s about how strong you are, how much value you deliver to customers and that makes you successful,” Kuehner said after signing a memorandum of understanding (MoU) with Malaysia Airlines Bhd (MAB) to collaborate in enhancing digital lifestyle for travellers today.

He expects industry growth for 2019 to be flattish after industry revenue fell for the last three years.

“After three years of shrinking revenue for telcos, maybe a bit of stabilisation possibly on telcos’ revenue side next year, so we’re slightly positive,” Kuehner said.

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Earlier, Celcom Axiata and Malaysia Airlines inked an MoU to provide benefits spanning multiple areas across both companies, including Enrich rewards, flight discounts for Celcom customers, attractive roaming plans and more.

Kuehner said both Celcom and Enrich customers will enjoy innovative digital offerings and rewards, starting Feb 1. Both companies are still in the exploratory stage to discuss the details.

On anotehr matter, Kuehner said a merger between Axiata Group Bhd and Telekom Malaysia Bhd (TM) makes sense in terms of scale , delivery and network perspectives.
He said fixed mobile convergence is a trend worldwide and it is also relevant in Malaysia, adding that TM is strong on the fixed line side while Axiata is strong on the mobile side.

“It (the merger) makes sense and this is where rumours come from, because a lot of people are talking about it. But not everything that makes sense will always happen. It’s difficult to predict,” Kuehner

“It (merger) is up to the shareholders. I don’t have an opinion. I’m not the one calling the shots,” said Kuehner, adding that there is no indication on the merger from parent Axiata Group.

News of a possible merger between the two emerged some nine months ago, with both companies deniying news of a reunion after a demerger in 2008. Analysts are still banking on the merger to set the tone for an industry consolidation, which is deemed as the logical route forward.

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