Telenor: No Plans To Reduce Stake In DiGi

Norway’s largest telecoms group Telenor will not reduce its stake in subsidiary DiGi.Com Bhd, Malaysia’s mobile-phone company, despite the disappointment of failing to secure a government 3G license tender March 3.
Telenor dismissed rumors in Malaysia’s media and markets that it would sell some of its shares in DiGi after its shares dropped 10% on Kuala Lumpur’s stock exchange on March 03 when it learnt it had not won.
“Our commitment to DiGi has not changed, despite losing the tender,” Telenor spokesman Esben Tuman Johnsen told Reuters.
“It was very disappointing to lose the tender and we were very surprised by the explanation given.”
The Malaysian government told DiGi it had lost out on the tender because of the high foreign ownership in the company. DiGi is 61% owned by Telenor and had been a favorite to win one of the two tenders.
Analysts said the Malaysian government’s reasons and the fact that DiGi did not have a 3G license would influence Telenor’s long-term policy in the region. 
A Malaysian pay-TV operator MiTV Corp Sdn Bhd and TT Dotcom Sdn Bhd, a unit of a broadband telecoms company, won the two licenses but the government has ordered them to work with DiGi to offer some services.
“To achieve a win-win situation, the successful applicants have been directed to work with DiGi and other service providers as a mobile virtual network operator,” the Communications Ministry said in a statement.
Both of DiGi’s larger local rivals, Maxis Communications Bhd and Telekom Malaysia Bhd, have already owned 3G licenses distributed under a previous tender, but have said they do not expect their services to generate profits for 4 or 5 years.
Malaysia has almost 17 million mobile phone subscribers, around 65% of the population, making it Southeast Asia’s third most developed mobile market after Singapore and Brunei.


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