This is the first time a collaboration of this scope is being explored by the players in Malaysia and perhaps regionally. Similar tie-ups, although few, are found in other parts of the world. The whole idea to explore a partnership is led by thinning of margins and rising costs especially in the broadband area.
If it eventually takes off it could have a huge impact in the market place, giving the two an edge over its rivals but it could also be anti-competitive for the consumer as these two could fix prices of services to consumers.
Yesterday both parties inked a memorandum of understanding and a definitive agreement is expected to be hammered out before the year is out. The sharing is for existing and future infrastructure but both will not jointly bid for future spectrum.
“Previously we were just sharing the transmission towers but this new arrangement allows us to be more efficient, provides more capacity and wider reach to more consumers,’’ Axiata Group managing director/CEO Datuk Seri Jamaludin Ibrahim said. Last night he was named CEO of the Year at the Frost and Sullivan Asia Pacific ICT Award 2010.
Telenor head of Asia Pacific and chairman of DiGi Sigve Brekke said he was “bullish over its prospects’’ as it was getting difficult to manage cost, and sharing will bring prices down and make services better for consumers.
All this cost sharing is great for the telcos and could force other players to be on their toes but for consumers, the threat is there that service providers could become monopolistic.
But Jamaludin does not think so. To him “this collaboration will have zero impact to reducing competition; in fact it will lead to more competition.’’
He cited an earlier collaboration between the two that led to 60% of tower sharing and that helped the companies save cost and cut redundancies.
Celcom CEO Datuk Seri Shazalli Ramly said the alliance was at the technical level and not marketing of products and services; hence, operators would have to compete by coming up with better and more innovative products. He said any cost savings would be passed on to the consumers.
“The collaboration in itself starts with the customer and we can promise it will be a tough fight, (competition) will not change, it will be (more intense),’’ added Henrik Clausen, the newly appointed CEO of DiGi.
Axiata has a similar tie-up with Telenor, the parent of DiGi, for their operations in Bangladesh and it’s that new friendship that led Axiata and Telenor group to explore collaboration between DiGi and Celcom.
Also present at the event was Malaysia Communications and Multimedia Commission chairman Tan Sri Khalid Ramli who hopes to see more collaborative efforts in the sector.
Celcom is also not opposed to working with other parties.
“If (Maxis Communications Bhd) says let’s talk, (we would say) why not, this is an industry effort,’’ Jamaludin said. Axiata is Celcom’s parent.
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