Telekom Malaysia plans mobile acquisitions overseas
Telekom Malaysia plans mobile acquisitions overseas
Bloomberg, Kuala Lumpur
Telekom Malaysia Bhd., Southeast Asia's second-largest phone
company, will seek to regain its No. 1 position in the country's
mobile market in three years and make acquisitions abroad where
sales have grown faster than at home.
The company, 45 percent owned by the government, has invested
in Bangladesh, Cambodia, Ghana, South Africa, Sri Lanka and
Thailand. It expects to conclude talks to buy a stake in India's
Idea Cellular Ltd. by the year-end, Telekom Chief Executive Abdul
Wahid Omar said.
"We want to focus on markets close to home, markets which will
offer significant growth," Wahid told reporters in Kuala Lumpur.
"Perhaps we have mentioned Indonesia in the past, there are a few
other countries we are looking at."
Wahid, a 40-year-old accountant, was appointed by Telekom on
May 19 to raise efficiency in the company, as part of Prime
Minister Abdullah Ahmad Badawi's pledge to better run state-
invested companies and lift returns.
Telekom has been grappling with slowing growth in its fixed-
line business and lost its top spot in the mobile-phone business
to Maxis Communications Bhd., the country's biggest cellular
company.
Telekom also competes with Digi.Com Bhd., the smallest mobile-
phone company.
About 48.5 percent of Malaysia's 25 million population use
mobile phones and the usage, or so-called penetration rate, may
reach 64 percent by 2008, Wahid said. That will be the saturation
point, where the pace of new customer growth will slow.
"The home market for cellular phones is hitting saturation,
and one obvious avenue for them is growth overseas," said Goh Han
Hau, who helps manage US$263 million in stocks, including
warrants of Maxis and Telekom at Allianz General Insurance
Malaysia in Kuala Lumpur.
Telekom will consider markets abroad where the mobile-phone
penetration is still low, Wahid said. The company is partnering
Singapore Technologies Telemedia Pte to buy a 33 percent stake in
Idea Cellular, India's No. 5 mobile-services provider.
Revenue from Telekom's overseas business rose 29 percent over
the past two years, compared with 9.8 percent growth in its local
business, according to Bloomberg data.
Overseas investments accounted for 29 percent of the company's
1.39 billion ringgit ($366 million) profit last year.
The contribution will drop by half in 2005 because the company
has cut its stake in Telkom South Africa Ltd., said Chief
Financial Officer Jaffa Sany Ariffin.
Telekom, through its unit Thintana Communications LLC, in June
reduced its shareholding in South Africa's phone monopoly by 14.9
percent.
Thintana, a venture with Texas-based SBC Communications Inc.,
retained a 15 percent stake in Telkom South Africa.