Maxis-Astro tie-up coming soon?

T. Ananda Krishnan, the single largest shareholder in Maxis Bhd and Astro Malaysia Holdings Bhd, is believed to be looking at a corporate exercise involving the two entities to strengthen their position in the changing technology and media landscape.

Sources said the low-profile tycoon, who controls the companies through privately-owned Usaha Tegas Sdn Bhd, has been looking at how to position the group’s telecommunications and media business in line with increasing competition.

“The global trend is for a consolidation between the companies that provides connection to consumers and content providers. It is happening everywhere and Usaha Tegas is in the best position to capitalise on it,” said a source.

Ananda, who tends to read the trend well ahead of others especially in the area of technology, sees increasing competition for both Astro and Maxis.

“Broadband rates are not going to go up. That is a given as both the new and the old government want faster connectivity at lower rates. Going forward it would be hard to maximise further unless competitors drop out.

“As for Astro, it is facing competition from multiple fronts. Illegal satellite dishes are being installed to tap into the services of other pay-TV operators located in other countries. Astro is also facing competition from over-the-top (OTT) service providers offering specialised content at lower rates,” said the source.

Among the OTTs are Netflix, which features largely western movies and dimsum that concentrates on oriental contents from South Korea to Thailand.

An analyst said he would not be surprised if Ananda uses Maxis to takeover Astro.

“It is similar in the United States where traditional telecommunication companies are buying entertainment companies. Corporate exercises between telco and entertainment companies have received the nod from the US legal system last week,” said an analyst.