Yoodo needs to be sold off on Celcom-Digi merger

by AZREEN HANI / pic source: yoodo.com.my

CELCOM Axiata Bhd and Digi.com Bhd will have to divest Celcom’s Yoodo brand (that is, the Divestment Business) within 18 months, according to the Malaysian Communications and Multimedia Commission (MCMC).

This is a part of the conditions set by the MCMC for the telcos’ merger.

Read more: MCMC gives approval for Celcom-Digi merger

“If the Applicant fails to divest the Divestment Business within eighteen (18) months from the Closing, the Applicant commits to cease Yoodo’s operation within three months of the expiry of Divestiture Period,” MCMC said in the copy of undertaking that was published online today.

This divestment includes the divestment of all tangible and intangible assets (including intellectual property rights) used exclusively by Yoodo or which are necessary for the operation of the Yoodobusiness.

The Divestment Business shall not include assets not used exclusively by Yoodo or are not otherwise necessary for the operation of Yoodo, it stated.

Celcom and Digi also could not acquire the brand, whether directly or indirectly, for a period of three (3) years after the completion of the sale of Yoodo, unless approved by the regulator.

They also shall not restore or revive the Yoodo brand, and cannot absorb directly or indirectly Yoodo’s subscribers from the Effective Date of the merger until the three-year period has expired.

MCMC has issued a notice of no objection to the proposed merger between Celcom and Digi.

MCMC said in a statement today that the commission has conducted a thorough assessment of this merger considering both telcos are the second-and the third-largest telcos in the country.

In April, Yoodo, which is owned by Celcom, told The Malaysian Reserve that it aims to increase its brand awareness in order to gain more revenue and boost its customer base.

Yoodo head Chow Tuck Mun said there is still much that needs to be done to increase its brand awareness even though the company has been around for four years.

As a digital telco, Yoodo’s target consumers are the youth as they manage their lifestyle digitally.