DiGi’s industry collaboration efforts unaffected by merger dissolution

The firm has been cooperating with other players for many years to build, share infrastructures

by NG MIN SHEN/ pic by MUHD AMIN NAHARUL

DIGI.COM Bhd will continue to work with industry players in facing the latest developments in the telecommunications sector such as 5G, despite the dissolution of merger talks between its parent, Telenor ASA, and Axiata Group Bhd.

Digi chairman Haakon Bruaset Kjoel (picture) said although both Telenor and Axiata “continue to believe in the strategic rationale” behind the proposed consolidation, the parties were not able to conclude the merger discussions.

“Having said that, this doesn’t stop Digi’s efforts in making sure that we are working with the digital ecosystem, that we’re collaborating within the industry to make sure that we can address, for instance, challenges or opportunities in 5G when it eventually comes to this market,” he told reporters at Digi’s Small Business, Big Impact: Sustainability as a Key Business Driver forum in Subang Jaya yesterday. 

Kjoel added that Digi has been cooperating with other industry players for many years to build and share telecommunication infrastructures, which the telecommunications company (telco) views as a commodity.

5G, the next generation of cellular network technology, is said to be anywhere from 100 to 400 times faster than 4G while having lower latency or the time required for devices to communicate via wireless networks.

However, deploying the technology comes at a high cost.

The National Fiberisation and Connectivity Plan, which is aimed at, among others, enabling 5G implementation nationwide, has an estimated budget of RM21.6 billion, of which half would be funded by telcos in Malaysia.

In May, Telenor and Axiata announced the companies’ plans to merge their Asian operations in a non-cash merger, which is said to deliver up to RM20 billion in cost synergies, in response to rising data monetisation cost, heightened competition and growing capital expenditure needs despite flat revenue growth.

The proposal also included plans to merge Digi with Celcom Axiata Bhd to create Malaysia’s largest mobile operator. Telenor controls 49% of Digi, while Celcom is wholly owned by Axiata.

However, Telenor and Axiata said on Sept 6 that they mutually agreed to end talks for the merger due to “complexities” involved in the deal.

Both parties added that they did not rule out the possibility of a future transaction, while Axiata chairman Tan Sri Ghazzali Sheikh Abdul Khalid said the termination of the proposed merger would not affect the group in achieving its digital champion ambitions.

Meanwhile, Kjoel highlighted the importance of forging and strengthening partnerships with similar goals in order for organisations to achieve sustainability.

He said Telenor, through Digi, has seen a “clear red thread” in its sustainability journey with partners over the years, as the sustainability agenda can only be achieved through an industry-wide effort.

“You need to do that across the partners that Digi works with in the value chain, and also with the rest of the industry and other industries.

“We are all at different levels in our journey but with a very clear purpose…that is to make sustainability an integrated part of the business,” Kjoel said.