Malaysia govt should not push telco mergers, says analyst

By Julian Matthews

KUALA LUMPUR–The Malaysian government should back-away from attempting to merge the six telcos in the country into three as it would do more harm than good to the industry, says a Gartner Group analyst.

“Consolidation is necessary. But when the government intervenes, it risks delaying an inevitable process. Government intervention tends to strengthen the hand of the weakest and undermine the fittest. That will not strengthen the sector,” said Bertrand Bidaud, director of telecommunications for the Asia-Pacific Gartner Group.

Bidaud said intervention by governments elsewhere has not been positive citing France Telecom, Deutsche Telekom and several Asian mergers that remained “superficial”.

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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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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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Foreigners OK’d to Take 61 Pct. Stake in M’sian Telcos

By Julian Matthews

May 11, 1998 (KUALA LUMPUR) — The Malaysian government is allowing foreign companies to own majority stakes in local telecommunication companies.

The foreign equity ceiling was raised to 61 percent from 49 percent in an effort to pump in much-needed funding for ailing local telcos.

Energy, Telecommunications and Posts Minister Leo Moggie said the new policy will only be valid for five years, after which foreign companies will have to revert their equity back to 49 percent.

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Equal Access Trial for Telcos Set for July

By Julian Matthews

April 17, 1998 (KUALA LUMPUR) — Malaysia will roll out a trial run for equal access to all fixed-line telecommunication services beginning in July.

Minister of Energy, Telecommunications and Posts Leo Moggie said the government will test the new policy on selected exchanges to allow consumers and operators to familiarize themselves with its operational and billing aspects.

Equal access will allow subscribers to choose from one of five telecommunication service providers when making calls, regardless of the network he or she is on. Currently, such calls are mainly routed by the dominant fixed-line operator Telekom Malaysia Bhd.

The four competing telcos are Technology Resources Industries Bhd., Binariang Bhd., Time Telecommunications Sdn., Bhd. and Mutiara Swisscom Bhd.

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Malaysia OKs Higher Foreign Equity for Telcos, New ISPs

By Julian Matthews

March 5, 1998 (KUALA LUMPUR) — The Malaysian government has raised the ceiling on foreign ownership of telecommunication companies to 49 percent from 30 percent, and granted four new Internet service provider licenses.

Energy, Telecommunications and Posts Minister Leo Moggie said the moves were aimed at further liberalizing the industry.

Foreign parties interested in acquiring stakes in local telcos must have proven track records and be able to add value to the companies they are buying into, he said. Analysts said raising foreign equity was a lifeline to local operators facing tight liquidity as a result of the region’s financial crisis.

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