Axiata Group Berhad has announced that it’s selling its telecom tower business in Myanmar due to the challenging business environment. As per reports, the Edotco Group is selling its assets for $150 million in cash. The move follows the sale of Axiata’s 80% equity stakes in Ncell back in late 2023.
In a recent filing with Bursa Malaysia, Axiata said that it’s entered a share purchase agreement to sell its entire stake of 87.5% in Edotco Investments Singapore Pte Ltd for $150.
Reports have emerged that Pun Tower Investments Ltd., owned by Yoma Group founder Serge Pun is acquiring the stakes. Analysts state that removing Edocto Myanmar from its active business books in Myanmar will help it invest efficiently in the frontier markets. Edotco is seeking new investors in the Philippines to raise capital. Therefore, market experts also agree that selling the assets means a clearer path ahead for the group.
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Axiata exits Myanmar business after selling shares in Ncell in Nepal
Axiata pinned the blame on the country’s macroeconomics and challenging business environment for its exit. The telco conglomerate said, that the “decision to exit Myanmar was made due to deteriorating macroeconomics and operating environments in Myanmar.” It seems that when it comes to telco business, Myanmar is not the only country. There are several challenges afflicting telecom operators in Nepal too.
“Capital from the Proposed Divestment – Myanmar, aligned with Axiata’s commitment to maintaining a strong balance sheet and enhancing shareholder value, will be re-deployed to reduce debt,” it added. Edotco served in the Myabmar tower business since entering the market in 2015 after acquiring a 75% stake in Digicel Myanmar Tower Company (MTC). At the time, the tower business received a valuation of $220 million.
Edotco operates over 3,000 towers across Myanmar. Besides, it also looks after 58,000 telco towers in nine countries in Asian countries. These include Indonesia, Cambodia, Malaysia, Laos, Bangladesh, Philippines, Pakistan, Sri Lanka, etc. Axiata is another foreign tech firm to exit Myanmar in recent years. Ooredoo and Telenor have also called it quits on their telecommunication business in the Asian country.
Other telcos including Ooredoo and Telenor have exited Myanmar in the past couple of years. The challenging business environment largely emanates from the brutal civil war that continues to adversely affect the country from all sides. The news doesn’t come as surprising though. Axiata, while posting its fourth-quarter financial report in February 2024 had expressed a desire to exit the Myanmar market.
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Axiata is setting priorities after all!
Much has been said about Axiata’s plan to exit Nepal especially given the value it’s selling the equity stakes in Ncell for. However, the company maintained that it’s quitting its telco unit in Nepal due to the challenging business environment. It has offered the same reasoning for the decision to leave Myanmar.
In Nepal, Axiata Group Berhad sold its 80% equity stakes in Ncell to Spectrlite UK for $50 million. The company bought the majority of shares in 2016 for $1.37 billion after purchasing Reynold Holdings. Further, the company had reasoned “unfair taxation and regulatory uncertainties” behind its bombshell exit plan. It also must be kept in mind that Ncell’s license was expiring in 2029 and Axiata would have earned nothing if it remained the owner till that time. Now as it faced the brunt of the issues in Myanmar, it swiftly ended the business there too. Maybe the company has prioritized a peaceful and steady business operation by running down its debt. That must come from selling off its “liabilities”.
