Malaysia's number one mobile phone company Maxis Communications Bhd. has embarked on a strategic plan to acquire cellular assets of Time dotCom Bhd. which experts say is crucial for Maxis to maintain its domination.

"That has been our advise to them (Maxis). Buy Time dotCom," an expert with a foreign telecommunications giant told AFP.

"Maxis right now does not have enough bandwidth to increase their subscriber base. If they acquire Time, they can increase subscribers," the expert said on condition of anonymity.

Nizam Idris, regional economist with Singapore-based IDEA Global, said Maxis should acquire Time dotCom if they want to dominate the mobile-phone market since it was currently operating at full capacity.

A good idea

"It is a good idea. It is a fast way to increase capacity. If they expand on their own, it will be time consuming," he told AFP.

Maxis' present subscriber base stands at 2.8 million and it has a strong desire to maintain its pole position.

The Star newspaper Saturday reported that Maxis had struck a deal to buy Time dotCom for RM1.5 billion.

Time and Maxis officials when contacted declined to say whether the two companies were engaged in negotiations.

"Even if there is, it would be highly confidential," one official said.

A Time official told AFP that its assets were "not being fully utilised." Time has the smallest market share, though it owns a 5,200 kilometremiles) fibre optic network.

An acquisition in Time dotCom would provide Maxis with an additional 650,000 cellular users as well additional bandwidth. The proposed asset purchase would push Maxis' subscriber base to over 3.5 million mobile users, The Star said.

Debt-ridden Time Engineering Bhd., which has a 45 percent stake in Time dotCom, has proposed selling some of its stake as part of efforts to repay 162.03 million dollars in bonds.

The next repayment of about RM170 million is due in June next year.

Time dotCom posted a six months to June net loss of RM62.03 million against a profit of RM1.11 billion a year earlier.

Facing challenge

Maxis now faces a challenge from state-owned communcations giant Telekom Malaysia Bhd.

Telekom Malaysia, which owns a 31.25 percent stake in Technology Resources Industries Bhd. (TRI), plans to merge its cellular operator, TMTouch with TRI's Celcom (M) Bhd., Malaysia's number two mobile-phone operator.

Telekom hopes to create the largest cellular player in Malaysia following the merger with 3.3 million subscribers. The third player is DiGi Telecommunications Sdn Bhd.

If the Maxis-Time dotCom and Telekom plans are realised, Malaysia would have three communications operators as proposed by the government.

Prime Minister Mahathir Mohamad recently said that he wants to see Malaysia's largest telecoms rivals reduced to three from five at present, saying the marketplace was too small to accommodate five players.

Listed in July, Maxis' major shareholder is Usaha Tegas Sdn Bhd., a company controlled by tycoon Ananda Krishnan, who built the world's tallest buildings, Kuala Lumpur's Petronas Twin Towers. AFP