While the industry was expecting a new entity to emerge from the share suspension of both Axiata and Digi on 1 April, the news released by the telecommunication operators was that the Malaysian Communication and Multimedia Commission had instead issued an SOI.
The Statement of Issues (SOI) was handed to both parties was in pursuant to the MCMC’s Guidelines on Mergers and Acquisitions, in it, the regulator listed various points that could arise from the merger that is of concern. MCMC has asked the operators concerned to submit their comments, information, and remedies on its assessment of the competition effects that could arise from the Proposed Merger.
The list of 4 items on the SOI that would require the entities to address which are all on competition issues and would have to provide possible remedy recommendations is as follows.
Firstly is on the national retail market for mobile & low-speed fixed broadband and data services, including the related local distribution channel markets. Secondly, the national retail market for mobile voice and Person-to-Person (P2P) messaging services, including the related local distribution channel market(s). Thirdly, the national wholesale market for mobile voice and P2P messaging services (including network sharing arrangements); and lastly, the national wholesale market for mobile broadband services (including network sharing arrangements).
The issuance of the SOI is part of the merger assessment process under the Guidelines. It is intended to provide an opportunity for Digi Tel and Celcom to make a submission(s) in response to the MCMC’s preliminary findings, in line with the Guidelines.
The SOI indicates that this is not the final decision of the MCMC. Digi and Celcom have said that they will continue to engage with MCMC to provide a comprehensive response to the SOI for its considerations prior to their final decision.
