Axiata eyes consolidation deals in Asia
Asia’s third-largest mobile services group outside Japan and China by subscribers, is eyeing deals in Bangladesh, Indonesia and Sri Lanka, but reckons getting into Myanmar will be “very tough”, chief executive officer Datuk Seri Jamaludin Ibrahim said in an interview.
Axiata, valued at close to US$19bil and with a cash pile of US$2.8bil, is expanding in the fast-growing Asian telecoms sector as Jamaludin nips at the heels of South-East Asian market leader Singapore Telecommunications Ltd and India’s Bharti Airtel Ltd.
Its expansion comes at a time of surging demand for smartphones as Asian consumers’ spending power grows and relatively untapped economies such as Myanmar and Laos open up for business.
Axiata, which already has more than 200 million subscribers, agreed last month to pay around US$155mil for Cambodia’s Latelz Co Ltd, creating the country’s No. 2 mobile firm with five million subscribers.
“That’s a good reflection of what we intend to do,” Jamaludin told Reuters. “It can be a small company, it can be a relatively large company. Generally what we would like to do is consolidation.”
Bangladesh, Sri Lanka, and Indonesia where Axiata spent more than half its record RM5.4bil capital expenditure last year were the most likely candidates for similar deals, Jamaludin said.
“That’s the inorganic expansion. Of course, there are opportunities for new countries but in reality there’s very few left,” he said.
Axiata hopes to enter Myanmar, whose political opening has brought into play a new market of around 60 million people with the world’s second-lowest cellphone penetration after North Korea.
But the lure of tapping one of Asia’s last frontier markets has attracted a host of potential bidders, including Digicel and Norway’s Telenor, for the two telecoms licences Myanmar plans to offer to foreign operators. Five or six of the bidders were “really aggressive,” Jamaludin said. “It’s going to be a tough one, a very tough one.”
In contrast, Jamaludin said Axiata had little interest in entering Vietnam, which he said was an “anti-climax” after widespread excitement over its potential a few years ago.