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In your opinion (of course justified by all the evidence extracted from the annual reports and

materials above), what could have triggered the companies to go for such intervention? Defend

your answer with clear evidence by using information made available in the article above.

afford, adding to the weakness of incapability of capital strength to win over a huge opportunity parties look forward to realising the potential of the proposed merged company, which is in the marketplace. But as the saying says, "in every problems there lies opportunities", the expected to culminate in a stronger capacity to drive digitalisation in society broadly, for scenario leads to so many strategic moves among the telcos. It has been the talk of town that consumers, businesses, the partner ecosystem and for the development of local talent. soon there will be a big event of marriage between Digi and Celcom. A huge change is going MergeCo will provide better network quality and coverage as it will be primed to invest in to take place in the landscape of telecommunication industry in Malaysia. Those strategic network expansion to support growing demand for data and digitalisation. In addition, as moves were the evidence of how companies could be to bring out their ability to compete, and societies and businesses increasingly turn to digitalisation for productivity and efficiency gains, conquer, and such an interesting piece of real event where reflection on Organizational Change MergeCo will be well-placed to drive 5 solutions, catalyse new growth opportunities for large and Development could be realised and discussed. enterprises and SMEs, and attract and partner global digital giants in support of JENDELA and Below are few newspapers releases that student could use in attempting to answer the MyDigital aspirations. MergeCo will also leverage on combined economies of scale to deliver assessment questions with regards to Organizational Change and Development. benefits to customers through strengthened core distribution, improved network operations, and efficiencies realised from operational activities. In further unlocking the nation's digital potential, MergeCo has proposed to invest up to News 1: RM250 million over five years to build a world-class Innovation Center in Kuala Lumpur to Celcom-Digi merger receives MCMC clearance keep Malaysia at the forefront of the global digital evolution. The Innovation Center will be Decision paves the way for parties to advance to next phase of regulatory and shareholder pivotal in advancing extensive research and development leveraging 5G, AI and IOT approvals technology. In addition to catalysisg and nurturing a knowledge-based workforce in line with Malaysia's digital aspirations, local digital start-ups will be also able to leverage the platform Kuala Lumpur, 29 June 2022 - The Board of Directors of Axiata Group Berhad ("Axiata") to leapfrog their technology and innovation capabilities. and Digi.Com Berhad ("Digi") announced in filings to Bursa Malaysia today that the parties have received a Notice of No Objection ("Notice") from the Malaysian Communications and To address the preliminary issues identified by the MCMC, the parties have offered a set of Multimedia Commission ("MCMC") to proceed with the proposed merger of Celcom's and undertakings to ensure that consumers in Malaysia will continue to benefit from effective Digi's telco operations ("MergeCo"). competition in the telecommunications sector. The undertakings include: The merger application for Celcom and Digi was submitted to MCMC in July 2021. The 1. Divestment of 70 MHz of MergeCo's spectrum across 1800 MHz, 2100 MHz, and 2600 issuance of the Notice follows a substantive assessment of the proposed merger application, MHz, the first band to be returned to the MCMC within 24 months after completion of the and due consideration of Axiata's and Digi's ("the parties") response to MCMC's Statement merger, and the second and third bands to be returned within 36 months after completion of Issues ("SOI") released earlier in April 2022. The Notice signifies that MCMC does not of the merger; object the proposed merger and that the parties to advance to the next phase of the proposed 2. Establishing a separate independent business unit for MVNO wholesale business under transaction. MergeCo within six months after completion of the merger and ensuring continuity of access to wholesale services for MVNOs at terms no worse off than existing agreements; MergeCO well-poised to accelerate the nation's digital aspirations and spur new growth 3. Divestment of Celcom's "Yoodo" brand within the stipulated time after completion of the opportunities for all merger as committed to MCMC, which currently offers fully digital and customisable retail Axiata and Digi are positive on the prospects of the proposed merger having passed a mobile plans to subscribers; Enabling non-exclusive distributors in the Sabah, Sarawak, significant milestone in the ongoing approval process. Upon completion of the transaction, theKelantan, Pahang and Terengganu regions by the end of Year 3 after completion of the aspirations and bring new, advanced services to consumers across the region," said Jorgen merger; and Arentz Rostrup, Executive Vice President and Head of Telenor Asia. 4. Positioning the existing Celcom and Digi brands as products under a single MergeCo The parties believe that the strategic and financial rationale of the proposed transaction corporate brand by the end of Year 2 after completion of the merger. represents a compelling value-creation opportunity for all stakeholders. The parties remain The parties have assured that they will place the highest priority on minimising any potential confident that MergeCo will realise the full value of the estimated synergies, and that the service quality impact to customers, while delivering these undertakings. combined entities will establish a stronger, more resilient digital converged services provider Tan Sri Shahril Ridza Ridzuan, the Chairman of Axiata said, "We thank the MCMC for their well-positioned to respond to shifting market conditions and to drive Malaysia's digital ambitions forward. approval and guidance to reach this significant milestone. We reiterate our commitment to ensure that the proposed merger delivers benefits to the nation as a whole. It is aimed at The completion of the proposed transaction will now be subject to the approval of the Securities combining the best of Celcom and Digi so that our customers and community have good Commission, Bursa Malaysia, by both Axiata and Digi shareholders, and other customary options in accessing solutions to participate more equitably in this digital era." terms and conditions. The parties estimate to complete the proposed merger within the second "Delivering improved network and connectivity for our customers is clearly an imperative. As half of 2022 as announced previously. At completion, Axiata and Telenor will hold equal two companies with a strong track record in contributing towards nation-building, we are also ownership of 33.1 percent each in the new merged company, which will be named Celcom excited about the digital inclusion and growth opportunities that MergeCo and the proposed Digi Berhad and will continue to be listed on Bursa Malaysia. Innovation Centre will catalyse. We look forward to playing an active role in encouraging national competitiveness through the provision of world-class connectivity and research News 2: platforms whilst also supporting the nation's entrepreneurs and digital talents in the race to confidently position Malaysia for growth in the digital economy." Celcom-Digi merger to enable better end user experience Monday, July 11th, 2022 at Business | News "Today brings us a step closer to creating a strong Malaysian company with the combined scale, experience, network, and innovation leadership to drive Malaysia's digital growth in the With the aim set by the Malaysian Communications and Multimedia Commission (MCMC) coming years. Together, Celcom and Digi will bring better innovations to meet our customers for the amalgamation of the fifth-generation network (5G) into 80 per cent of Malaysians' lives growing digital needs and for all participating in the digital economy to capture new growth by 2024, the Celcom Digi Bhd merger announcement would undoubtedly enhance and be the opportunities in a fast-changing world. We will now focus on completing the remaining precursor for a better end-user cellular experience said an academician. Universiti Teknologi necessary steps to conclude this transaction and work on delivering a seamless integration Malaysia (UTM) School of Electrical Engineering lecturer, programme to bring the vision and value of the merged entity to reality for the benefit of many," Leow, who is also a research fellow with the UTM Wireless Communication Centre, said the said Haakon Bruaset Kjoel, Chair of the Board of Directors of Digi.Com Bhd. infrastructure from these two companies would undoubtedly be a plus point from the cellular "We have reached a positive milestone in the Malaysian merger process with this regulatory user point of view. He said the inculcateon of 5G enhances the limitation of the existing clearance. We are excited to move towards realising the full potential of bringing these two technologies - the 4G, in terms of bandwidth, connection density as well as latency, as companies together, establishing a commercially stronger and more resilient digital service demonstrated during the COVID-19 pandemic where many users access the Internet. provider. With the proposed structural moves in Thailand and Malaysia, Telenor has a clear ambition to create future-fit companies that can better support ambitious national digital"Whenever a network is busy with too many users, there will be bottlenecks in the network. On capacity ratio, we don't have enough bandwidth to cater to users' demand and by the end of the day, users' experience will be affected," he said. On the 5G rollout, although comparatively slower than other developed countries which started in 2019, Malaysia has to deal with the challenges other countries may not have. Citing South Korea and Singapore as examples, Leow said they have very extensive and comprehensive fibre connectivity and just needed to install 5G bay stations as fibre connections are there to support it and Singapore's geographical terrain attributes made it easier to implement. He said the country's 5G rollout will take some time, particularly in areas where the nation doesn't have extensive availability of high bandwidth fibre links and may need additional time to construct fibre networks to provide the connectivity to 5G bay stations. "We already have commercial 5G services in Malaysia since 2021 in several major cities and it will be coming to different parts of Malaysia eventually. Based on MCMC's plan to have 80 per cent population to be 5G-enabled by 2024, we are on track although we started a bit later compared to other developed countries," he added. - BERNAMA News 3: Malaysia govt, telcos on collision course over 5G wholesale plan Date: 5/25/2022 The Malaysian government is on a collision course with domestic mobile operators over its 5G wholesale network plan. Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz has rejected an appeal by the telcos to allow them to take a controlling stake in the new network, the Malay Mail reported Monday. He has told them that he will not extend the June 30 deadline for investors to sign up for the scheme. The operators - Digi Telecom, Celcom Axiata, Maxis and U Mobile - have told the government that a "passive minority" stake in the project would not allow them to safeguard their investment. The Ministry of Finance has offered nine Malaysian telcos a combined 70% stake in the newly-formed state-backed wholesaler, Digital Nasional Berhad (DNB). So far, only two smaller operators, Telekom Malaysia and YTL Communications, have accepted. In a letter to the minister earlier this month, the four incumbents asked that they be allowed to acquire 51% of DNB, Reuters revealed last week.Figure 1: Celcom Axiata's 5 year Group Financial Summary 5-Year Financial Summary RM Million 2017 2018 2019 2020 2021 KEY FINANCIAL RESULTS Revenue 6.340 6.527 6.298 6.153 6,336 Telecommunication revenue . Service revenue 5.969 5.827 5.644 5,428 5,341 - Others 65 75 87 84 95 . Sales of device 306 625 567 641 900 EBITDA' 2.886 3.033 3.311 3,080 3,009 Earnings before interest and taxes (EBIT) 2,100 2.229 2.113 1.805 1.729 Interest cost 132 130 246 253 210 PBT 1,985 2.080 1.892 1.622 1,515 PAT 1,477 1,541 1.433 1.221 1,162 Organic capital expenditure (Capex) 1,345 818 751 720 803 Operations (ops) cash flow 2.577 2176 2.062 2,432 2,606 Figure 2: Digi's Financial Report Summary"The MoF-proposed role as minority shareholders does not appear to make it feasible for any of us to add value as shareholders and is not commensurate to our contribution to the industry, or our duty to our shareholders and customers," they said. Repeated roadblocks The impasse threatens to further delay Malaysia's path to commercial SG, which has hit repeated roadblocks as the government has attempted to shoehorn the industry into its single wholesale network plan. Alternatively, if Aziz is genuinely set on calling the telcos' bluff, Malaysia will be trying to implement 5G without the support of the existing network operators. That is an approach even more radical than the wholesale network concept. Reportedly, if the operators don't take a stake in the DNB network, Aziz is willing to allow investment from private equity firms. His refusal to allow the four incumbents isn't his first rebuff. Last December, he rejected their call for the issue of a second wholesale license (see Malaysia SG network boss blames 'posturing' MNOs for delays). Besides the ownership structure of DNB, the four telcos are also unhappy with the proposed interconnection terms for access to the wholesale network, that they may need to lease DNB instead of having autonomy of running their own network. Quick References: FIVE-YEAR GROUP FINANCIAL SUMMARY Operational Highlights All in RM Mrdon unless stated oth FY2021 Y2020 FY2019 FY20182 FY2017 Revenue 25,901 24.203 24.583 23,080 24,402 2 Earnings Before Interest, Tax, Depreciation and 11,404 10.657 10.619 0.334 Amortisation (EBITDA) 9,230 Earnings from Associates & Jointly Controlled Entities 19 (3) (420) (404) Profit Before Tax (PRT) 2,174 1,171 2,780 (4,073) 1,936 Prost After Tax (PAT) 1,277 624 1.015 (4.875) 1.162 Prost After Tax and Minority Interests (PATAMD) 819 365 1.458 (4.762) 909 Normalised PATAHI' 1,326 1010 1,205 Total Shareholders' Equity 18.005 18,181 17.477 24,731 Total Assets 72.350 67.962 40,534 65,055 69.911 10 Total Borrowings (exclude lease labilities) 19,050 17.745 10,820 19,130 19.184 11 Total Lease Liabilities 10,171 9.629 0.840 N/A Customers (million)" 163 157 153 149 340