In Saturated Market, Telecom Companies Eye Consolidation

In an effort to keep their hold on a highly competitive market, at least two mobile telephone service providers have entered into consolidation negotiations, Posts and Telecommunications Minister So Khun said yesterday.

Mr Khun said that the Hello and MFone mobile phone companies had entered into consolidation negotiations and he urged companies to share infrastructure such as antennas in order to improve line connections.

“We don’t need to encourage them to consolidate with each other because they can do it by themselves,” Mr Khun said yesterday.

“Some of them have started already…such as 011 and 016,” he added, referring to the digit prefixes of numbers used by MFone and Hello.

Mr Khun also said two other phone companies had entered into negotiations, though he declined to name them.

A February “Deal List” released by DFDL Mekong lists Hello’s former partner Telekom Malaysia International as a client in the purchase of MFone’s parent company Camshin.

The list also showed AZ Communications, which operates the Internet service provider Online, as another suitor for Camshin. However, a DFDL Mekong representative said yesterday the list did not necessarily represent ongoing or completed negotiations.

Hello CEO Simon Perkins said yesterday he was unaware of any consolidation or merger discussions but added that such talks could have taken place between parent company executives, which would not have had to involve him. He also said that consolidation could still be part of Hello’s future.

“It’s possible,” he said. “But Likely? That’s hard to comment on.”

Officials from MFone could not be reached yesterday.

Bretton Sciaroni, a senior partner at the legal consultancy Sciaroni & Associates, said more consolidation discussions would likely take place within the next year or two.

“I think it’s pretty clear the market is oversaturated,” he said. “With that number of operators, it’s hard to make money.”


Related Stories

Latest News