The proposed merger of Malaysian mobile network operators (MNOs) Celcom and Digi has been given the green light by the Malaysian Communications and Multimedia Commission (MCMC). In a statement confirming the development the regulator announced it had issued a ‘Notice of No Objection’ after completing what it called a ‘comprehensive assessment’ of the matter.
For their part, Celcom and Digi issued a joint press release confirming receipt of the Notice of No Objection, while also detailing the undertakings that they have agreed to in order to secure regulatory approval for their merger. As per the terms of approval they will:
• Divest 70MHz of the post-merger entity’s (‘MergeCo’) spectrum across the 1800MHz, 2100MHz and 2600MHz bands, with the frequencies in the first band to be returned to the MCMC within 24 months after completion of the merger, while spectrum in the latter two bands will be handed back within 36 months
• Establish a separate independent business unit for MVNO wholesale business under the merged company within six months of the merger completion, while ensuring continuity of access to wholesale services for MVNOs at terms no worse off than existing agreements
• Divest Celcom’s Yoodo brand within ‘the stipulated time after completion of the merger as committed to MCMC’
• Enable non-exclusive distributors in the Sabah, Sarawak, Kelantan, Pahang and Terengganu regions by the end of the third year post-merger
• Position the existing Celcom and Digi brands as products under a single MergeCo corporate brand by the end of the second year after completion of the merger
In terms of next steps, the completion of the proposed transaction will now be subject to the approval of the Securities Commission, Bursa Malaysia, by both Axiata and Digi shareholders, and other customary terms and conditions, with the merger now expected to complete in H2 2022. Upon completion, Malaysian telecoms group Axiata and Norway’s Telenor will each hold equal ownership of 33.1% in the new merged company, which it has confirmed will be named Celcom Digi Berhad and will continue to be listed on Bursa Malaysia.