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Digi and Celcom Need to Explain How to Address Competition Concerns in the Market Before Merging

02/04/2022

Axiata and Digi both applied for suspension of trading on the Malaysian Stock Exchange on April 1, after the MCMC issued letters of inquiry to the two companies requesting an explanation of the post-merger solution.

 

It is understood that the Malaysian Communications and Multimedia Commission (MCMC) sent a letter of inquiry (SOI) to Axiata Celcom and Digi to explain how the merger would address initial competition concerns in specific markets, as well as suggest potential remedial solutions.

 

MCMC’s letter was sent to provide both companies with an opportunity to respond to MCMC’s initial comments. The letter of inquiry does not represent MCMC’s final decision and both companies have indicated that they will provide a full response.

 

The four specific markets listed by MCMC as having initial potential competition concerns are the national retail market for mobile and low-speed fixed broadband and data services, the national retail market for mobile voice and person-to-person (P2P) messaging services, the national wholesale market for mobile voice and P2P messaging services (including network sharing arrangements), and the national wholesale market for mobile broadband services (including network sharing arrangements).

 

Digi and Axiata announced in April last year that they would merge and form Celcom Digi Berhad, becoming the largest telecommunications company in Malaysia. The newly formed Celcom Digi Berhad will be approximately 17.9% owned by Malaysian institutional funds.

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