KUALA LUMPUR, July 1 — The merging of telecommunications companies (telcos), which are shareholders in Digital Nasional Berhad (DNB), would not guarantee said parties’ decision-making power in the board, its chief executive, Augustus Ralph Marshall, said.
DNB is the government-owned entity to roll out the nation’s 5G network.
Marshall was responding to queries as to whether the Celcom and Digi (MergeCo) merger would give the firms a larger say in DNB, and if they could decide the composition of DNB’s board.
“Well, when that happens, we look at it again. There are provisions for what happens in the event of a merger.
“I think you should explain that ownership of the (telcos) shares in DNB has got nothing to do with how the telco itself operates. They are there as a shareholder, just like anybody else who is a shareholder in a public company. The policies will all continue. There are no changes in the policies and processes and the objective of DNB.
“It will be the board. The board and the shareholders.
“There is a limit as to how far it can go. That will all be made clear,” Marshall said when met at Angkasapuri here, after a briefing session on the 5G deployment, with members from Umno.
Axiata Group Bhd and Digi.Com Bhd on June 29, said they had received clearance from the Malaysian Communications and Multimedia Commission (MCMC) to go ahead with the proposed merger between Celcom and Digi, which could create the largest mobile service operator in Malaysia. Digi and Celcom are currently the second- and third-largest mobile service operators in the country.
In a joint statement, the telcos announced that MCMC’s nod to the merger signifies that they will be advancing to the next phase of the transaction.
Celcom, Digi.Com Bhd, Maxis Bhd, and U Mobile Sdn Bhd, are the big four telecommunications firms known as CDMU, under DNB.
“Well, they are allowed to 12 per cent each right, at the moment? So, if they merge, it will be 22, 23 (per cent). What else can it be?
So? They paid for it, isn’t it? So, it’s OK. What additional say will they have with 22-23 per cent? The policies of DNB, the objectives of DNB, the deliverables of DNB will all remain the same,” Marshall added, when asked about DNB’s provisions for the merger.
When asked if Celcom and Digi would be able to nominate board members after the merger, Marshall said that details on the matter would be made available in two months, as discussions are currently ongoing.
Marshall said that he is also very pleased with the cooperation and support from all parties involved in the 5G roll out plan, adding that not many countries in the world would take the initiative on the matter, as far as Malaysia has.
The merger application was submitted in July 2021 and has since gone through comprehensive assessments by the MCMC.
Previously, MCMC issued a Statement of Issues to the applicants in accordance with the mergers and acquisitions guidelines dated May 17, 2019 to address concerns that this merger will reduce competition in the communications market.
In response, the applicants had submitted an undertaking containing their commitment to addressing the competition issues highlighted by MCMC.
On April 8, 2021, Axiata dan Telenor Group announced that they were discussing the proposed merger between Celcom and Digi to form a new entity known as MergeCo, and that it was expected to be completed in the second half of 2022.
