It has been reported that parent companies of Celcom and Digi, Axiata and Norwegian based Telenor are in merger talks for their Asian telecommunication business. As of today the shares of Axiata has been suspended on the KLSE for a pertinent announcement leading to the news.

Rumour has been on going for some time on Axiata looking to find a local partner for Celcom, who has been losing grounds over the years due to stiff competition from new entrants, mostly from U Mobile which has been disrupting the market with cheaper plans. But while many were guessing the merger to be between Celcom and TM (both owned by a common stakeholder, Khazanah), the latest news is quite a surprise. However, the regional play for both the telco giants is understandable as the conglomerates operate in various parts in the area including Cambodia Nepal, Indonesia and Sri Lanka where Axiata has presence while both have strong footing in Thailand, Bangladesh, Pakistan and Myanmar as well.

Combined the new entity will be serving over 300 million mobile subscribers making it the single largest telecommunication company in Southeast Asia. Here in Malaysia, Celcom which is currently languishing as the third mobile operator at just below 10 million user base and Digi holding the top spot with 14 million will automatically become the biggest player with 24 million subscriber base. Jointly they can offer better connectivity, leveraging on each others network strengths and could even possibly offer competitive pricing with economy of scale on their side. Looking ahead the parent companies are also more inclined to benefit from 5G roll-out which will require huge capital, as a single entity the cost can be spread and both can benefit from the savings.

And as for the millions using the network, there is bound to be changes coming your way, on the onset all looks good as both telco will use their expertise to offer better service to their customers and fight to keep Maxis and U Mobile at bay. Celcom can learn a trick or two from Digi and hopefully this would mean cheaper plans and better coverage for everyone.