Thai, Malaysian firms ink $260m telecoms deal

Thai, Malaysian firms ink $260m telecoms deal

BANGKOK (AFP): Thai mobile phone company, Samart Corp. plc. yesterday signed a US$260 million strategic telecommunications tie-up deal with Telekom Malaysia Bhd. at a ceremony here.

Under the agreement, Telekom Malaysia -- which as recently waged an aggressive expansion campaign in several markets in Asia and Africa -- takes a 20 percent -- or $71 million -- stake in Samart.

In addition, the Malaysian firm will assume a 33.3 percent share of Samart unit Digital Phone Co. Ltd., a statement issued at the signing said.

The total value of Telekom Malaysia's investment is 6.76 billion baht ($260 million), the statement said.

Analysts said the move would allow Malaysia Telekom to seek fresh markets, while Samart would benefit from its new partner's technological knowhow as well as from easier cashflow and more funds for development.

Participants in the deal and their governments hailed the agreement as a major step in strengthening ties between the two firms and between the two neighboring countries.

Telekom Malaysia chief executive Dato' Mohamed Said Bin Mohamed Ali said the relationship between Telekom and Samart had brought together two successful telecommunications companies from neighboring states.

He said he hoped the partnership would "pave the way for more joint ventures between Thai and Malaysian companies and businesses."

Thai Transport and Communications minister Suwat Liptapallop said at the ceremony that the deal was a "significant milestone in the continuing development and internationalisation of the Thai telecommunications industry. "

Malaysia's Energy, Telecommunications and Posts minister, Datuk Leo Moggie said his country "strongly endorsed" the formation of "this international alliance and investment by Telekom Malaysia."

"We feel that the spirit of liberalization here parallels our own in Malaysia," he said.

The firms described the deal as a major "strategic partnership" between the two firms, aimed at maximizing their resources.

Samart Executive Chairman Charoenrath Vilailuck said his company chose Telekom Malaysia as a strategic partner after "several months" of searching among a number of well-known international companies in the industry.

"In addition to its strong customer-driven experience and business performance, Telekom Malaysia shares the same vision as Samart in spearheading the new convergent industry of computers, telecommunications and media," he said.

"The alliance is certain to bring the integrated capabilities of the two companies to bear on a broad range of telecommunications and electronic commerce businesses in the future," he added.

Charoenrath said Thailand was "the key to all future growth in the Indochina region" because of its key geographical position in Southeast Asia.

All the shares being taken up by the Malaysian firm are currently owned by the Vilailuck family, which controls the Samart group, said Sirichai Rasameecham, Samart Executive Vice President, corporate finance and operations.

He added that some of the funds would go to the construction of a new group headquarters in Bangkok.

Telekom Malaysia has been steadily expanding its influence and interests in Asia and Africa in a bid to widen the scope of its business which would otherwise be hampered by Malaysia relatively small domestic market.

It has taken up stakes in telecommunications companies in South Africa, Ghana, Guinea and has also bought into mobile and wirelesss telephone systems in Bangladesh and Cambodia.