The Malaysian Communications and Multimedia Commission (MCMC) announced that the agency has no objections to the merger plans between major mobile carriers Celcom and Digi. The proposed merger will see the second and third-biggest telcos combine into the largest in the country known as MergeCo.
The MCMC said that after a comprehensive assessment, it is giving its approval for the deal after both telcos agreed to overcome issues surrounding competition [PDF] raised by the regulator. Digi and Celcom put out a joint statement regarding the greenlight from MCMC, promising that the merged company would provide better network quality and coverage to customers.
Interestingly, part of the agreement between the telcos and MCMC is that Celcom will need to sell off its sub-brand Yoodo within 18 months of the deal closing. The two telcos also agreed to ensure that existing and new Mobile Virtual Network Operators (MVNOs) are not affected by the merger and will continue to be given access to wholesale services for three years.
Another part of the undertaking will see MergeCo having to return the 1800 MHz band to MCMC within 24 months as well as the 2100 MHz and 2600 MHz bands within 36 months after the completion of the merger. And despite the original announcement saying that Digi and Celcom will remain as separate brands after the merger, the agreement also states that the merged company will need to operate all its prepaid and postpaid brands as a single corporate brand within two years.
The two companies first announced the merger in April 2021 and filed the proposal with MCMC the following July. Parent companies Axiata and Telenor Asia initially said that the merger was expected to be completed by the second quarter of 2022, but earlier this year, Axiata revealed that the timeline for MergeCo to be formed had been moved to the second half of 2022.
While MCMC has given the thumbs up, the proposal will still need approval from Bursa Malaysia and the Securities Commission, with Digi having already submitted an application for the deal to the latter in January 2022. Upon completion, Axiata and Telenor will both hold 33.1% of the new company, which will be listed on Bursa Malaysia as Celcom Digi Berhad.