Malaysian Network Detail Merger Plans

Malaysia's Maxis Communications has outlined its integration plan that aims to merge Maxis and TIMECel's network operations. Announcing this to reporters at the media briefing, Maxis Chief Executive Officer, Dato' Jamaludin Ibrahim said with the network integration, both sets of customers will be able to enjoy improved network quality and coverage progressively over the next few months.

The benefits will be realised in two stages. Maxis subscribers will start to experience the benefits when a dual-band network is implemented by the third quarter, followed by TIMECel's subscribers at the end of October. In stage two, the full experience of these benefits would be realised for both sets of customers with the completion of the integrated dual-band network by the third quarter of 2004.

The benefits of the acquisition to Maxis include additional spectrum, reuse of network equipment and network sites, subscriber growth and economies of scale. The additional spectrum will provide Maxis with savings in network capital expenditure, allow Maxis to reduce congestion in high traffic areas, expand its addressable market due to lower cost-to-serve, and facilitate a much more aggressive roll out of new value-added and mobile data services at a lower cost and at a higher throughput.

"On top of this, the ability to reuse TIMECel's network equipment, and the increase in the number of physical sites from 2,600 to more than 3,000 sites by year-end will enable us to reduce our lead-time for network expansion, increase coverage and to fill in the blind spots faster," he also said.

Coverage would be enhanced in critical areas including the North-South Expressway and trunk roads, main towns, points of entry (airports/ railways), and industrial/ residential/ commercial areas. Elaborating on the integrated dual-band network, Jamaludin said, "This is the most practical, both in terms of costs and synergy. At this moment, we are building a superset with the aim of regionalizing equipment use. This means a 900/1800 network but we will be using two vendors to deploy the equipment for different states in the country".

In addition to network integration, the brands, IT systems, customer services, financials and people will also be integrated. At the outset, Maxis and TIMECel brands will co-exist. By the end of the year, only the Maxis and Hotlink brands will remain to take the lead in the postpaid and prepaid market respectively to launch all new mobile and data services.

As part of the integration of customer support services, outlets will be rationalised. Maxis Centers, i-Centres and the Maxis Authorised Service Agent (MASA) will serve both sets of customers by the third quarter while the TIMECel customer service centers will be phased out over the next three months. In terms of organization structure, Jamaludin said that as with any acquisition, there would be a need to reorganise the structure of TIMECel to reap the benefits of economies of scale. It is expected that there will be a 30% to 50% reduction in TIMECel's operating expenditure by next year.

"However, there are only minor changes to the organization structure at this time. I will assume the position of Chief Executive Officer," he also said."

Posted to the site on 19th May 2003