CHANGES EASE PATH TO POS­SI­BLE MERGER

But an­a­lysts say chal­lenges await in­com­ing group CEO Shaz­a­lli

New Straits Times - - Business -

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.

TM has more than 28,000 em­ploy­ees, mak­ing it one of the largest em­ploy­ers in Malaysia.

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