Celcom, Broadcast Australia in digital TV transmission network venture

KUALA LUMPUR (Dec 12): Celcom Axiata Bhd and Broadcast Australia are teaming up to set up a nationwide digital television transmission network in Malaysia.

The two parties signed the agreement on Monday which would enable them to bid for projects in the design, CONSTRUCTION [] and long term operation of digital TV infrastructure.

Celcom chief executive officer Datuk Seri Shazalli Ramly said Celcom had been seeking to diversify its business and this partnership was the first step towards achieving that objective.

'This collaboration lowers the risk for such a crucial and large national project, with both partners having a proven track record and easy access to the required funding," he said.

Axiata CEO says stake in India's Idea for long term

HONG KONG (Nov 16): Malaysia's Axiata Group Bhd, which owns about a fifth of Indian mobile phone carrier Idea Cellular Ltd, does not plan to sell its stake in the Indian company, considering itself a long-term investor, Axiata's chief executive said on Wednesday.

Idea, controlled by India's Aditya Birla conglomerate, is the country's fourth-biggest mobile operator with more than 100 million subscribers. Axiata bought a stake in Idea in 2008.

In February, Axiata said it took a charge of 1.1 billion Malaysian ringgit ($348 million) after writing down its investment in Idea. Indian media reports have said Axiata is looking to sell the stake.

"We believe in the long run," Axiata President and Group Chief Executive Jamaluddin Ibrahim told Reuters on the sidelines of a mobile industry event in Hong Kong.

"In fact we have raised our stake slightly," he said, referring to a 0.9 percent stake buy in August that took Axiata's total holding to about 20 percent.

Idea is operating in a fast-growing yet ferociously competitive mobile market. A vicious price war in the crowded 15-operator market has kept profits under pressure for the last two years, while a multi-billion telecommunications licensing scandal has prompted regulatory changes.

India's government is in the process of overhauling decade-old telecoms rules and there is little clarity yet on several contentious issues, leading to uncertainty among market players.

"There are concerns," Jamaluddin said. "But we are positive on Idea. We are positive on India."

Idea last month said it was focusing on increasing revenue from high-margin data services after reporting a sharper-than-expected drop in quarterly profit.

Idea shares are up more than 42 percent this year, outperforming the broader CNX NIFTY Index, which has lost about 18 percent. Top Indian mobile carrier Bharti Airtel has risen nearly 13 percent this year. ' Reuters

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Axiata says no immediate plans to up IDEA stake beyond 20%

KUALA LUMPUR: Axiata Group Bhd has no immediate plans to increase its stake in Indian-associate IDEA Cellular Ltd beyond a 20% threshold, the company said, denying reports that it is looking to raise its stake to 25%.

'We have no current plans of increasing our stake in IDEA,' Axiata said in an emailed reply on Thursday, Aug 18.

It confirmed, though, that the group had just increased its holdings in IDEA by 0.9% through open market purchases, raising holdings to 19.98%.

Citing unnamed sources familiar with the deal, The Economic Times of India reported Axiata may be looking to raise its stake in IDEA to 25%, once it receives permission from IDEA's main shareholders, the Aditya Birla group.

IDEA shares rose as much as 3.23% to INR97.5 intra-morning following the report. The stock was trading at INR95.95 at 1pm Kuala Lumpur time.

Axiata had paid an average of INR103 for the additional 0.9% stake in IDEA, OSK Research wrote in a note this morning, citing shareholder filings on the Bombay Stock Exchange. That's 9.05% above the INR94.45 that IDEA closed on Aug 17.

'A small stumbling block' to Axiata increasing its holdings in IDEA beyond 20% could be the approval needed from the Adita Birla Group, OSK Research wrote in the note this morning, ahead of the statement from Axiata to deny the news report.

The additional stake purchase from the market 'would serve to average down the implied cost of its investment in India's third largest mobile operator', OSK Research added in the note, pointing out that Axiata had written down the value of its 19.1% stake in IDEA to INR120 in 4QFY2010.

OSK retained a 'buy' on Axiata and a target price of RM5.77, calling the group its preferred pick in the telecoms sector alongside TELEKOM MALAYSIA BHD [].

Axiata rose as much as 3 sen or 0.6% to RM5.01 this morning before ending the first session at RM4.99, up 1 sen or 0.2% from Wednesday's close.

OSK Research maintains Neutral on telcos

KUALA LUMPUR: OSK Research is maintaining its Neutral call on telcos but downgraded DiGi from Buy to Neutral.

It said on Thursday, April 21 Malaysia and Singapore have agreed to cut roaming rates by 20% for voice calls and 30% for SMS with effect from May 1. The mobile operators that have signed reciprocal agreements to cut roaming tariffs are SingTel, StarHub, M1, Celcom Axiata, Maxis, Digi and U Mobile.

'While lower roaming rates are typically negative for the telcos in the short term given the inelastic nature of roaming calls, it is expected to stimulate usage in the longer term to offset the revenue dilution,' it said.

OSK Research is maintaining its NEUTRAL recommendations for SINGTEL (FV: S$3.00) and STARHUB (FV: S$2.85) whilst keeping its BUY rating on M1 (FV: S$2.85), its'' top pick for the Singapore telecoms sector.

For the Malaysian mobile telcos, it is retaining its BUY recommendation on AXIATA (BUY, FV: RM5.83) and NEUTRAL call on MAXIS (FV: RM5.20).

'We are downgrading our recommendation on DIGI to NEUTRAL from BUY previously as its share price has rallied 15% since our upgrade in late January and has surpassed our DCF fair value of RM27.90,' it said.