CHANGES EASE PATH TO POSSIBLE MERGER
But analysts say challenges await incoming group CEO Shazalli
CHANGES at the top management of Telekom Malaysia Bhd (TM) will ease the path for the group’s possible merger with Axiata Group Bhd, said industry analysts.
They, however, caution that incoming new TM managing director and group chief executive officer (CEO) Datuk Seri Shazalli Ramly would not have a stroll in the park with several key challenges awaiting him.
AmInvestment Bank Bhd said as Shazalli was formerly with Axiata and given that it was part of TM back in 2008, the usual management dysfunctions arising from a text-book merger case could be significantly reduced.
Thus, the possible merger would simply be a reintroduction for the bulk of the two companies’ employees and leadership, it said.
“As mentioned in our report on March 17, speculations have reemerged that Axiata and TM may be in the midst of a re-merger after their 2008 de-merger.
“The driving factors for the potential re-integration stem from TM’s own convergence drive amid a slowdown in the sector’s revenues compounded by the difficulties in monetising rapidly increasing mobile data demand,” said AmInvesment Bank, which kept its “buy” call on TM with a fair value of RM7.90 per share.
Analysts said one key challenge for Shazalli was to make TM’s new cellular arm, webe Digital Sdn Bhd, more competitive.
Nevertheless, analysts believe he was up to the task, given his marketing savviness and motivational skills. These traits helped him transform Celcom Axiata Bhd from an industry laggard into a competitive player.
Shazalli helmed Celcom Axiata Bhd as CEO from September 2005 to September last year before taking on the broader Axiata role as corporate executive vicepresident and regional CEO for Asean last year.
He turned Celcom around in about eight years and at one point, it posted more than 30 consecutive quarters of top-line and bottom-line growth, a feat that not many mobile operators can shout about.
Another big challenge for him is to ensure that all TM employees are on the same page, especially when he plans to execute new strategies.
TM has more than 28,000 employees, making it one of the largest employers in Malaysia.
Meanwhile, Axiata congratulated Shazalli on his appointment but said it was saddened to lose such a talent.
“Highly valued by the group and the Axiata board, especially for his 11 years as CEO of Celcom, Shazalli was instrumental in steering the company to 32 consecutive quarters of growth with his focus on brand building, innovative marketing strategies, understanding customer needs and strengthening the company’s fundamentals.
“In its zenith, Celcom successfully captured the lion’s share of the mobile market to outperform its competitors, winning the recognition and admiration of both local and international industry and business stalwarts,” it added.