Cell phone operator Maxis Communications today said its tie-up with TimeCel has been completed on schedule and will boost subscriber growth as it seeks to close the gap with rival Celcom.

Chief executive Jamaludin Ibrahim said the integration was completed in just six months and would lead to RM1 billion savings in capital expenditure over the next four years.

The merger costs turned out lower than projected, with capex this year at less than RM190 million and one-time operating costs at below RM120 million, down from initial estimates of RM250 million and RM120 million respectively, he said.

"Maxis is on track to meet its estimated capex savings of one billion ringgit over the 2003-2007 period. We have already saved RM150 million this year and we expect to save RM200-300 million per year from 2004 onwards," he told reporters.

Jamaludin said Maxis has four million subscribers as of June following the inclusion of TimeCel's 300,000.

Higher subscriber growth

Despite the growth, Maxis has been overtaken by rival Celcom, which also recently merged with state-owned Telekom Malaysia's unit TMCellular, to expand its customer base to more than four million.

"On record, they may have more subscribers than us but in terms of revenue, we are easily 20 percent more than their combined revenue and this is more important to us than just pure numbers," Jamaludin said.

He said Maxis expected higher subscriber growth following the integration with TimeCel.

"Without TimeCel, we were looking at growth in the high-teens this year and in the mid-teens next year. With the integration, we are confident of growing in the low 20s this year, and high-teens to low 20s next year," he added.

Some analysts have predicted growth could taper off to single-digit growth by 2005 as the cellular industry matures but Jamaludin said there was still room for expansion.

The Maxis-TimeCel and Celcom-Telekom mergers have reduced the number of players in the telecommunications industry from five to three.

The two giant rivals are in a neck-and-neck battle for Malaysia's growing cellular market, with the third licence-holder, DiGi, trailing behind.

Maxis and Telekom are the only two companies that have been awarded licences for third generation mobile phone networks in Malaysia, expected to be rolled out commercially next year. - AFP