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No job losses from Axiata Group Berhad (6888:KL) proposed merger with Telenor ASA


No job losses from Axiata Group Berhad (6888:KL) proposed merger with Telenor ASA

Axiata Group Bhd president and group chief executive officer Tan Sri Jamaludin Ibrahim has reiterated that there would be no job cuts if the proposed merger with Norwegian mobile operator Telenor ASA were to materialise.

He said the planned merger, which is expected to be completed by the third quarter of next year, would not result in any retrenchment as Axiata does not believe it should benefit from the merger at the expense of the employees.

“There will be no retrenchment (as a result of the proposed merger), that is a guarantee,” he told Bernama recently, allaying concerns after the news on the proposed merger broke earlier this month.

“We will not do things that harm our employees, as our philosophy has always included protecting our employees’ welfare. We are very strong at that.

“In fact, Celcom has always had a high number of employees, but we had never conducted any retrenchment, apart from offering the voluntary separation scheme (VSS),” said Jamaludin, who leads the telecommunications conglomerate since 2008.

Celcom had conducted three VSS exercises since 2015 and slightly over 350 employees had opted for them.

“Most people do not quite understand the telco industry. Although we are doing well, it is not the same for the global telco industry.

“In Europe, for example, in 2017, more than 100,000 jobs were lost, and growth was at only at 1.0 per cent. Profit was -3.0 per cent. If we do not do anything here, we might face the same problem,” said Jamaludin.

“It makes sense to pursue this merger now because whatever we do will be from a position of strength. We would have the ‘luxury’ to manage any reduction of workforce, if required, through voluntary means,” he added.

Jamaludin stressed that Axiata could not afford to stay stagnant in the domestic market on the back of convergence of products, as well as the emergence of cross-platform messaging and voice over IP service such as Whatsapp.

“There are so many choices in the telecommunications industry. You cannot monopolise. Take voice call for an example, how many of us are using local telcos such as Celcom and Digi for international calls? We use Skype and Whatsapp and these products have bypassed all of us,” he noted.

To recap, on May 6, both Axiata and Telenor announced that they were in discussions to establish a new merged global entity, MergedCo, by combining Axiata and Telenor’s Asian operations within their ASEAN and South Asia footprint markets.

The proposed transaction was aimed at enabling the MergedCo to bring together Axiata and Telenor’s Asian operations’ unique combination of scale, competencies and vast experiences in leading and managing emerging and frontier markets.

On the Malaysian front, the plan is to merge Celcom and Digi into MalaysiaCo.

Jamaludin refuted the notion that the merger would lead to a loss of Axiata’s identity and is akin to selling local assets to a foreign entity.

“This is a merger, not acquisition. The MergedCo will not be subservient to either Telenor Group or Axiata Group,” he pointed out, adding that despite Telenor having a majority stake, the spirit of merger of equals is fundamental to this exercise.

The board of directors’ mix will represent the shareholdings, but Jamaludin asserted that the board of the MergedCo, as well as MalaysiaCo would remain independent and professionally managed with the mandate to make all decisions in Malaysia and for the countries it operates in.

For the proposed MalaysiaCo, to balance the “equation” of the merger of equals, and to remain totally committed to the national agenda, the chairman will be nominated by Axiata and will be a Malaysian.

The merger between Telenor and Axiata would potentially deliver up to around RM20 billion incremental value in synergies through consolidation of assets and organisations, economies of scale and scope, and complementary best practices of the parties.

From one company, Axiata, the eighth largest public-listed company in Malaysia, this merger will result in the creation of four large companies in Malaysia.

The companies are the international MergedCo; MalaysiaCo, which will become the largest mobile operator in Malaysia; global TowerCo, which is the combination of edotco Group Sdn Bhd and Telenor’s Asian tower assets; as well as the region’s largest innovation centre that will see the MergedCo investing RM100 million annually.

Upon listing separately within five years, the MergedCo, MalaysiaCo and TowerCo could well be the top three, top five and top 25 of Malaysia’s public-listed companies and will substantially help attract investments into the domestic capital markets.

The parties have also stated their intention to list the MergedCo on Bursa Malaysia and another major international exchange within the next few years, while MalaysiaCo will be listed immediately.

While the shareholding will reflect the relative asset valuation resulting in Telenor being the majority shareholder of the global MergedCo with 56.5 per cent and Axiata at 43.5 per cent, both parties have acknowledged that this is preliminary and subject to adjustments and due diligence.

Jamaludin shared that Axiata had been engaging its employees and subsidiaries to address concerns over the merger exercise.

“This has been going on non-stop since the announcement. We have (been engaging) the press, investors and also (responding to) questions from our staff and management. I have had meetings with the top management of Robi because they are not included in the deal. I have also met the Minister and there will be a lot more to do.

“The reaction has been mixed. Some are still anxious and uncertain. I mean, there is a new company, so even though your job is secured, you do not know what to expect from this new company. That is a fair reaction,” he noted.

Jamaludin said the talks between Axiata and Telenor started eight years ago, and various configurations were explored, but they intensified in the last few months.

“We took the cue from Khazanah’s portfolio, which was restructured into strategic and commercial funds, with the intention for the latter to be run as commercial companies. That was one trigger point,” he said.

Khazanah has a 37 per cent stake in Axiata.

“It is great to have a Malaysian company, headquartered in Malaysia, to be a global champion and has every telecommunications company in the world recognising our brand, size and achievements,” he said. 

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 4.15.

The projected upper bound is: 4.75.

The projected lower bound is: 4.14.

The projected closing price is: 4.45.


A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 30 white candles and 17 black candles for a net of 13 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 76.8595. This is not an overbought or oversold reading. The last signal was a sell 6 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 60.83. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 6 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 52. This is not a topping or bottoming area. The last signal was a sell 5 period(s) ago.


The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 9 period(s) ago.

Rex Takasugi – TD Profile

AXIATA GROUP BHD closed up 0.040 at 4.440. Volume was 56% below average (consolidating) and Bollinger Bands were 143% wider than normal.

Open High Low Close Volume___
4.370 4.490 4.370 4.440 2,101,800

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 4.40 4.17 4.09
Volatility: 87 46 47
Volume: 10,414,510 4,732,522 4,943,311

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.


AXIATA GROUP BHD is currently 8.5% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of AXIA.KL at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AXIA.KL and have had this outlook for the last 8 periods.

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