Celcom-Digi merger is now complete,

forming the largest tech company on Bursa

Malaysia
  30 NO V 2022, S OY A CI NC AU
After obtaining shareholder approvals, Axiata Group Berhad and Digi.com Berhad have
officially announced the completion of the merger of Celcom and Digi. The two telcos not
only form the single largest mobile telco in the country but it’s also the largest local-listed
technology company on Bursa Malaysia.

According to the official statement, both Axiata and Telenor will hold equal ownership in
Celcom Digi at 33.1% each, followed by other shareholders such as EPF, PNB and KWAP.
Axiata received newly issued Digi shares representing 33.1% of the enlarged share capital of
Digi and a cash consideration of RM2.5 billion funded by Digi, and to be assumed by the
merged entity. Digi has also issued shares to Telenor to reach equal ownership following
Telenor’s payment of RM300 million to Axiata.

The merged parties aim to form a world-class Malaysian digital telco that will contribute
significantly towards the growth of the country’s digital ecosystem and economy. On a pro
forma basis for the financial year 2021, Celcom Digi will serve an estimated 20 million
customers, with revenues of RM13 billion and an EBITDA of around RM5.8 billion. It added
that it remains committed to the previously announced synergy target of RM8 billion.

Commenting on the successful merger, Axiata Group Berhad’s Chairman Tan Sri Shahril
Ridza Ridzuan said “Celcom Digi is strategically poised to invest in network expansion and
support the growth of Malaysia’s digital ecosystem. We are also heartened at the role this
tech giant can play in spurring talent development here in our very own backyard, as
Malaysia charts advancements in 5G innovations, automation, IoT, AI and cyber resilience,
among others. Moving forward, I am confident that Celcom Digi – backed by the global
experiences, excellent governance standards and financial strengths of Axiata and Telenor as
shareholders, is well-placed to serve Malaysian consumers and enterprises seeking to step up
on digital competitiveness in the current era.”

Meanwhile, Telenor Executive Vice President and Head of Asia Jørgen C. Arentz Rostrup,
said “The launch of Celcom Digi represents a major milestone in Malaysia’s digitalization
journey, aligned with Telenor’s ambition to build leading operators that serve customers with
relevant, attractive, and convenient products and services. By combining the strengths of two
well-loved local telco brands, the new company can enhance customer satisfaction and
provide a broader platform to serve the growing needs of Malaysian SMEs and large
enterprises. Employees can look forward to development opportunities, build new
competencies and shape the growth journey of a successful digital telecom champion,” he
added.

The merged entity has pledged to invest up to RM250 million over 5 years in building a
world-class innovation centre in Kuala Lumpur as part of its nation-building efforts. It aims
to catalyse the 4IR digital transformation and strengthen the local ecosystem through the
adoption of IoT, AI, cloud computing and 5G. It remains committed to bridging the digital
divide in rural areas to spur greater socioeconomic participation.

As part of MCMC’s approval, both Celcom and Digi have agreed to several undertakings to
address competition concerns. This includes returning a total of 70MHz of spectrum which
covers 1800MHz, 2100MHz and 2600MHz bands over a three-year period. Even after the
spectrum divestment is completed, Celcom Digi will retain 150MHz of spectrum which is
more than any other retail telco in Malaysia including Maxis which currently uses 115MHz.

In addition, Celcom and Digi will have to establish a separate independent business unit to
manage Mobile Virtual Network Operators (MVNO) while ensuring continued access to
wholesale service for MVNOs at terms no worse off than the current agreements. Yoodo, the
digital telco brand under Celcom, will need to be divested within 18 months after the
completion of the merger. If Celcom Digi fails to divest Yoodo within 18 months, they will
have to cease Yoodo operations within 3 months of the expiry of the Divestiture Period.

Within 3 years, Celcom and Digi must also remove exclusive arrangements with its
distributors in Sabah, Labuan, Sarawak, Terengganu, Pahang and Kelantan. At the same
duration, the merged company is not allowed to enter any new exclusivity arrangement with
exclusive distributors or other distributors in the region unless it is approved by the MCMC.

Moving forward, consumers should start seeing Celcom and Digi products gradually
positioned under a single corporate brand. Celcom and Digi have previously assured that they
will prioritise minimising any potential service quality impact to customers while delivering
these undertakings specified by the MCMC.