Axiata eyeing deals as Asia cellphone market booms

Jan 09 2013, 14:26 IST
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Axiata, valued at close to $19 billion and with a cash pile of $2.8 billion, is expanding in the fast-growing Asian telecoms. (Reuters) Axiata, valued at close to $19 billion and with a cash pile of $2.8 billion, is expanding in the fast-growing Asian telecoms. (Reuters)
SummaryAxiata, valued at close to $19 billion and with a cash pile of $2.8 billion, is expanding in the fast-growing Asian telecoms.

Malaysia's Axiata Group Bhd, Asia's third-largest mobile services group outside Japan and China by subscribers, is eyeing deals in Bangladesh, Indonesia and Sri Lanka, but reckons getting into Myanmar will be "very tough", CEO Jamaludin Ibrahim said in an interview.

Axiata, valued at close to $19 billion and with a cash pile of $2.8 billion, is expanding in the fast-growing Asian telecoms sector as Jamaludin nips at the heels of Southeast Asian market leader Singapore Telecommunications Ltd and India's Bharti Airtel Ltd.

Its expansion comes at atime of surging demand for smartphones as Asian consumers' spending power grows and relatively untapped economies such as Myanmar and Laos open up for business. Consumers in the seven major Southeast Asian countries spent nearly $14 billion on mobile phones in the year to September, according to market research firm GfK Asia. Smartphone sales surged 78 percent.

Axiata, which already has more than 200 million subscribers, agreed last month to pay around $155 million for Cambodia's Latelz Co Ltd, creating the country's No.2 mobile firm with 5 million subscribers.

"That's a good reflection of what we intend to do," Jamaludin told Reuters at Axiata's headquarters in Kuala Lumpur late on Tuesday. "It can be a small company, it can be a relatively large company. Generally what we would like to do is consolidation."

INORGANIC GROWTH

Bangladesh, Sri Lanka, and Indonesia - where Axiata spent more than half its record 5.4 billion ringgit ($1.8 billion) capital expenditure last year - were the most likely candidates for similar deals, Jamaludin said. "That's the inorganic expansion. Of course, there are opportunities for new countries but in reality there's very few

left," said the 53-year-old, who started his career as a lecturer in quantitative methods at California State University. He joined Axiata in 2008 from Malaysian telco Maxis Bhd.

Axiata - whose biggest shareholder is Malaysia's investment arm Khazanah Nasional Bhd - hopes to enter Myanmar, whose political opening has brought into play a new market of, around 60 million people with the world's second-lowest cellphone penetration after North Korea. But the lure of tapping one of Asia's last frontier markets has attracted a host of potential bidders, including Digicel and Norway's Telenor, for the two telecoms licenses Myanmar plans to offer to foreign operators. Five or six of the bidders were "really aggressive," Jamaludin said. "It's going to be a tough one, a very tough one."

VIETNAM, INDONESIA

In contrast, Jamaludin said Axiata had little interest

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