Axiata prefers to collaborate, not remerge, with TM: Jamaludin

KUALA LUMPUR: Axiata Group Bhd president and CEO Tan Sri Jamaludin Ibrahim said they are working to collaborate rather than remerge with Telekom Malaysia Bhd, citing that the rationale for the demerger in 2008 still holds water.
"What we have decided, is that instead of merger, we have to do a collaboration plan. We announced at the end of 2016, if I can recall, that we will piggyback on their fixed fibre to homes or HSBB, while they will piggyback on our mobile infrastructure. After we completed the agreement the market structure changed again, right now as we speak, it is being renegotiated," he said.
Jamaludin maintained that the reasons for the demerger back in 2008, which includes refocusing on their respective segments and internal reasons which cannot be disclosed, are still valid.
Meanwhile, on its Indian operations, Jamaludin said that the proposed merger of its associate company, Idea Cellular with Vodafone heralds a bright future but cautioned of a one off substantial technical impairment charge which will have "zero-impact" on performance and cash holding.
For FY17, Idea contributed a net loss of RM450 million to the group as compared to a profit of RM65 million in the year prior, with the entry of Mukesh Ambani controlled Reliance Jio into the market, which Jamaludin said "destroyed the market".
"We(Idea) were of course affected badly," said Jamaludin at its results briefing.
The merger of Idea and Vodafone will form the largest telco in India and one of the largest in the world.
On plans to divest stake in Idea, as its equity interest is expected to be diluted to below 10% post the said merger, he said it was a possibility in the long run.
"Our role as strategic partner will in a way disappear but not entirely, but because Vodafone is another strategic partner, because there cannot be two telcos running the show. So we will become primarily an investor, therefore Idea as a strategic asset of ours will not diminish but be reduced substantially," he explained.
On the listing of edotco, Axiata said it sees no need for a listing given it's comfortable financial position, Jamaludin said that it will be up to the infrastructure company should it see the need to raise funds by way of an IPO.
Axiata has capital expenditure for this year at RM7.4 billion(based on constant currency).
It is planning to save some RM1.5 billion in terms of cost, having optimised RM1.3 billion against its target of RM800million last year.
Additionally, Axiata is also looking to invest some RM150 million for its digital based companies in 2018.