Restructuring a Malaysian Operator

Malaysia's Maxis Communications says that its wholly-owned subsidiaries, Maxis Mobile, Maxis Broadband and Malaysian Mobile Services (formerly known as TIMECel) have entered into Reconstruction Agreements to facilitate an internal reorganisation of the activities of those subsidiaries.

The proposed reorganisation, which is subject to necessary approvals, would enable Maxis to realise the benefits of its acquisition of TIMECel, now known as MMS, in addition to ensuring consistency in sales and marketing strategies, efficient provision of network and applications services, and synchronisation of customer services, with respect to its mobile services operations and administration functions.

"The acquisition of MMS was completed in May. Integration of MMS's activities and operations with those of the other Maxis subsidiaries is crucial post-acquisition of MMS, to enable us to fully realize the benefits of the acquisition which include the additional spectrum, subscriber base, network equipment and site reuse," said Maxis' Chief Executive Officer, Dato' Jamaludin Ibrahim.

Maxis said in a statement to the Kuala Lumpur Stock Exchange that the proposed reorganisation will more closely align the operations of Maxis' subsidiaries to the licensing regime under the Communications and Multimedia Act, 1998 with their roles being redefined according to network facilities, network services and applications services provisions.

Maxis Broadband currently provides facilities (including network management) and transmission infrastructure for both mobile and fixed services and also provides fixed and Internet Service Provider (ISP) services. It will now have its role expanded to include owning, maintaining, building and operating radio facilities and associated switches.

Maxis Mobile (MM )will transfer its mobile applications services provision operations to Malaysian Mobile Services (MMS). MM will be responsible for special niche projects such as the Universal Service Provision ("USP"). In addition, MM will continue to provide corporate support and service functions, including those transferred from MMS, to Maxis and its subsidiaries ("Maxis Group").

MMS will be the mobile applications services provider handling all mobile subscribers, customer care, billing, sales and marketing functions.

Maxis does not expect any material adverse effect on the pre-tax profit of the Maxis Group for the current financial year ending Dec 31, 2003.

"There will be an initial one-off recognition of a deferred tax asset amounting to about RM800 million and this will have a positive impact on the after-tax profit and the net tangible assets of the Maxis Group for the current financial year," Jamaludin said."

Posted to the site on 12th August 2003