Ericsson Aims to Produce 5M Handphones, Despite Crisis

By Julian Matthews

July 31, 1998 (KUALA LUMPUR) — Swedish telecommunications giant Telefonaktiebolaget LM Ericsson aims to make 3-5 million units of mobile phones at its Malaysian plant by the year 2000.

Ericsson Mobile Communications (M) Sdn., Bhd. managing director Olle Ulvenholm said the company hopes to achieve the target when a new plant comes onstream by mid-1999.

Ulvenholm said the 500,000 sq. ft. plant, to be built and equipped at a cost of 100 million ringgit (about US$25 million), will be adjacent to the company’s existing plant in Shah Alam.

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British Telecom Buys Stake in Malaysian Telecom Firm

By Julian Matthews

July 28, 1998 (KUALA LUMPUR) — British Telecommunications Plc. has acquired a one-third stake in Binariang Bhd., a cash-strapped telecom company, for 1.8 billion ringgit (about US$450 million).

The deal is the single largest investment for BT in the Asia Pacific region, and the biggest by a foreign party in a Malaysian telecom company.

The July 24 announcement ended months of speculation in which Binariang had been linked with various foreign telecom firms including Britain’s Cable and Wireless Plc. as well as Singapore Telecommunications Ltd.

Richard Slogrove, BT’s managing director for Asia Pacific, said BT decided to invest in the company because it is confident of Binariang’s long- term prospects.

“Our investment in Binariang represents a total and long-term commitment of a foreign company in the local telecommunications industry as a whole and Binariang specifically,” he said.

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Read-Rite Closes Penang Plant, Lays Off 4,000 Workers

By Julian Matthews

July 21, 1998 (KUALA LUMPUR) — Read-Rite Corp., a maker of disk drive components, is closing its Malaysian operations and dismissing more than 4,000 staff.

“It is a difficult and painful decision, but we have to do it,” said Randall Hollis, vice president and managing director of Read-Rite Malaysia Sdn Bhd.

Hollis said “tremendous restructuring within the data storage industry” had forced the company to consolidate its Asian manufacturing facilities. He cited low product demand, low production volume and escalating costs as other factors for the move.

Read-Rite’s operations in Thailand and Philippines will take over the work of the Malaysian plant.

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Foreign Equity Cap For Telcos Raised to 61%

By Julian Matthews

The government is allowing foreign companies to buy majority stakes in local telecommunication service companies in a move to prop up their troubled ventures.

Energy, Telecommunications and Posts Minister Leo Moggie said the government has raised the foreign equity cap of local telcos to 61%.

This is the second hike in three months, indicating the dire straits local telcos are in from the protracted regional financial crisis.

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