Axiata's tower unit seeking deals to enter new markets, expand - CEO

By Krishna N. Das
KUALA LUMPUR, Oct 3 (Reuters) - Malaysian telecoms firm
Axiata Group Bhd AXIA.KL has asked its edotco towers unit to
seek deals to enter new markets or expand in Southeast Asia and
South Asia, and may consider selling a stake if attractive large
investment opportunities arise.
Axiata last month pulled the plug on a planned non-cash
merger with Norway's Telenor ASA TEL.OL citing unspecified
complexities. Axiata Chief Executive Jamaludin Ibrahim told Reuters on
Thursday his company did not see chances for another group-level
deal. A tie-up with Telenor would have created Southeast Asia's
largest telecoms operator with 300 million subscribers.
"Apart from the Telenor deal, there is no equivalent group
deal that will bring the same level of benefits," Jamaludin
said. "However, we are open for unit-level deals that would
result in in-country consolidation because in most cases, we
believe in significant synergies as a result."
Reuters reported this week that Axiata had received offers
for its 66.4%-owned Indonesian unit PT XL Axiata Tbk EXCL.JK
as well for edotco Group Sdn Bhd. "Investors love edotco and we continue to receive calls from
companies that want a piece of it," he said, adding that there
was no hurry for a sale.
"Having said that, edotco has been encouraged to take an
active M&A stance in terms of expansion into new markets or
increasing their tower portfolio within the ASEAN and South Asia
regions. So if there's a need for edotco or for that matter as
Axiata Group, to invest significantly, we might consider some of
the offers."
edotco operates in Malaysia, Bangladesh, Cambodia, Sri
Lanka, Myanmar and Pakistan with about 27,500 towers, making it
the 12th largest independent tower company globally, according
to Axiata. Its estimated worth is $2 billion, whereas Axiata has
a market valuation of $10 billion.
Jamaludin said the telecoms market in Indonesia needed fewer
players than currently present but that the company was keen to
"consolidate rather than be consolidated".
Reuters reported earlier, citing sources, that the company
was confident of sealing a deal to sell a stake in Jakarta-based
XL by next year but that it did not want to cede majority
control in the unit, because it holds the second-largest share
of the mobile phone network market in Southeast Asia's biggest
economy.
Jamaludin denied the company was under pressure from its
biggest shareholder, sovereign wealth fund Khazanah Nasional Bhd
KHAZA.UL , to improve returns but reiterated that the immediate
focus would be on profit and cash.
"This is also required to position us to invest in possible
in-country consolidation and new growth areas ... so we can
continue to deliver on our 'moderate growth, moderate dividend'
investor proposition," he said.