Concerns remain on proposed Celcom-Digi merger

Kenanga research: “Should the merger go through,we believe that having one less competitor allows operators to better compete in more sustainable ways via evolving cost efficiencies,and therefore, we are positive on the eventuality of a successful deal.”

AFTER Digi.com Bhd and Axiata Group Bhd’s subsidiary Celcom Axiata Bhd announced their merger plan to become the country’s largest telecommunications company, both stocks soared significantly.

Investors seem to like the idea of the merger, especially with the changing landscape of the telecommunications industry where players are losing revenue to the over-the-top (OTT) service providers such as instant messaging service WhatsApp and online TV Netflix.