Sunday, January 27, 2008

Telekom Malaysia to invest $100 million in Cambodia

Telekom Malaysia eyes Laos, Myanmar assets

  • Reuters
  • Saturday January 26 2008
(Recasts with details, background)
By Jennifer Tan
SINGAPORE, Jan 26 (Reuters) - Telekom Malaysia's mobile arm, TM International, is eyeing mobile assets in Laos, Myanmar and Vietnam, and will invest $100 million in Cambodia in the next two years to build its networks, the unit's chief said on Saturday.
Chief Executive Yusof Annuar Yaacob also expected TM International's revenues to grow up to 20 percent in the next three years.
"We're investing about $100 million in Cambodia over the next 18 to 24 months, and we're looking at a transaction in Laos at the same time -- we're talking to the government about taking over one of their mobile operations," Yusof told Reuters in an interview.
"As for Myanmar, which is the El Dorado of Asian telecoms, we're quite keen to do something there too -- we've been engaging with the government there."
The company is also keen on Vietnam and will wait for an opportunity to open up, he said.
"We've been engaged with the respective telecom companies for a couple of years now," he said, pointing out that MobiFone, Vietnam's second-largest operator, has been working to select a foreign adviser for an initial public offering.
A MobiFone executive said in December that the company's IPO would be delayed till May or June this year.
"It's also a partnership issue. Despite the war, they like American companies, but for an American company to come in the door, it might not be politically acceptable, so it might be an idea for us to partner one of these guys to increase our chances of taking a stake," Yusof said, adding that possible partners included AT&T Inc and Vodafone Group plc
Relations between Vietnam and the United States have warmed recently, culminating in the first visit to Washington last June by a Vietnamese head of state since the 10-year Vietnam War ended in 1975.
Last September, state-controlled Telekom said it would spin off its mobile business into a separately listed firm, TM International, to help unlock the value of its fastest-growing operations, separating it from its more staid fixed-line and broadband units.
TM International will house its domestic Celcom mobile unit and operations in nine other countries, including India, Indonesia, Bangladesh and Sri Lanka. Earnings growth at Telekom, Malaysia's fifth-largest firm by market value, has mainly been driven by revenue from Celcom and its 67 percent-owned Indonesian mobile unit, Excelcomindo Pratama Tbk
Looking ahead, Yusof said he expected TM International's revenues to grow above 20 percent, but this figure would fall when combined with Celcom's slower growth rates. Celcom accounts for about half the group's revenues.
"The numbers are between mid- to high-teens (in percentage terms) for the blended organisation, over the next three years," he added.
When Telekom decided to spin off TM International, there was a rush of interest from operators such as Vodafone, Emirates Telecommunications Corp (Etisalat), Orange and China Mobile, because there were so few attractive telecom assets left in Asia, Yusof said.
"But so far we have not made a decision on two things: one, whether we will go ahead with that strategic partnership, or two, when that will happen. Everybody is engaging us regularly."
He added that if a decision was made on the sale of a stake to a foreign investor, the size would be at least 20 percent.
"But the key is not what that number is, but what they would bring to us -- do we want somebody who comes with an asset that makes sense?"
The listing of TM International would be finalised in early or middle of the second quarter, ahead of the earlier target of end-June, Yusof added.
TM International would not need to raise capital following the spin-off, but if it did, it would raise between $300-$700 million, smaller than earlier projections of $1 billion, he said. (Editing by Ramthan Hussain)

No comments: