The year is 1945 and Cambodian men are packed into traditional longboats, ready to race each other in an event that “has been going on for more than 1,000 years” at the annual Water Festival in Phnom Penh.
Hello and Smart, two of Cambodia’s largest mobile operators, have merged as part of a $155 million deal aimed at consolidating the country’s oversaturated telecommunications market.
As part of the cash deal, Malaysia-based telecommunications firm Axiata Group Berhad, which operates in Cambodia as Hello Axiata Co. Ltd., will purchase a 90 percent share in Cambodia’s Latelz Co. Ltd., which operates as Smart Mobile, both firms said in a joint statement yesterday.
“If you look at the market in Cambodia right now and you look to see who have been the strongest, it is Hello and Smart,” said Hello CEO Simon Perkins.
“So, if you put those two very strong players together, then we can see this is a strong company. We are confident that the merger will put us on a stronger footing.”
Mr. Perkins added that no decision has been made on how the company would be branded or who would become the new company’s CEO.
The deal brings the number of players in the mobile phone market down to nine. For years companies have said there are simply too many mobile firms in the market and that the market would eventually be forced to consolidate.
In January 2011, Smart merged with Star-Cell, which was owned by Sweden-based TeliaSonera Group, as a way of boosting the company’s position in the market.
“This will include, amongst others, an enhanced level of customer service and one of the biggest mobile networks of Cambodia in terms of coverage and capacity,” said Thomas Hundt, CEO of Smart Mobile, in a statement discussing his firm’s decision to merge with Hello.
Kirill Mankovsky, Smart’s chief marketing officer, said the decision to merge was made because both companies had already consolidated strong positions in the current market.
“Smart Mobile is not having a tough time in Cambodia’s telco market. On the contrary, we are going into this merger in a position of strength—financially sound and profitable,” he said.
Latelz is owned by the Cyprus-based firm Timeturns Holdings Ltd. The merger will see Hello and Smart become the second-largest telecommunications company in Cambodia in terms of subscribers.
The deal is expected to bring the total amount of subscribers to 5 million between both companies.
Smart entered the Cambodian market in 2009, while Hello came more than a decade earlier in the late 1990s.
The merger is expected to be finalized by the end of the first quarter next year.
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