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Axiata Group, Malaysia’s largest and one of the biggest mobile networks in Asia by revenue has just purchased a majority stake in Myanmar Tower Company (MTC) for around $125 million.
Jamaica-based Digicel sold 75% of its stake in Digicel Asian Holdings. Axiata said the deal will deliver edotco with majority control of a tower company in a highly attractive tower industry within its geographic area of focus and expand the company's footprint beyond Axiata's existing operations.
In an interview with the company’s president, Dato Sri Jamaludin Ibrahim, he stated that the, “move will allow Axiata to create new revenue streams outside of its core mobile business”
Axiata is just one of the growing number of investors profiting in the development of telecommunications industry in Myanmar. Singapore has first set up its United Overseas Bank Ltd. followed by Japan’s Kirin Holdings.
As mentioned in many reviews, Myanmar has been an underdog in the sector with the slowest internet connection. Currently, the nation of 51 million people emerging from sanctions and decades of military rule, is witnessing sharp rise in demand for mobile phones to motorbikes as new jobs are created in a liberalizing economy. Moreover, the country’s gross domestic product (GDP) has grown by 8.3% this year, according to Asia Development Bank. This is sharper than Malaysia’s growth by 4.3%. These facts have attracted foreign investors to set up businesses within the promising nation.
The transaction does not have any material effect on the earnings and gearing of Axiata Group for the financial year ending December 31, 2015, except for the material effect to the net assets.
The move is expected to improve Myanmar’s mobile connectivity as it now has a good chance of network boost. It also continue to expand and solidify edotco, an integrated telecommunications infrastructure services company providing end-to-end solutions for networking owned and developed by Axiata Malaysia.
edotco was set up in 2012 to unlock the value of Axiata’s tower and infrastructure assets by driving new levels of operational efficiency in passive infrastructure management and diversifying its revenue streams. The subsidiary manages over 14,000 towers across its countries of operations including Malaysia, Bangladesh, Cambodia, Sri Lanka and Pakistan.
Analysts have been predicting this move by Axiata since its most recent acquisition of Axis Capital Group, one of the smaller telecommunication operators providing mobile networks in greater Jakarta region in Indonesia. It is yet unsure if Digicel will be renamed after its new stakeholders.
