Clixster and Enabling Asia click together in proposed merger

By Karamjit Singh December 2, 2014

Merger between both brings together their capabilities, opens markets
Clixster earlier did RTO of public-listed China Media Group to tap capital

Clixster and Enabling Asia click together in proposed merger

HISTORY will be made in the Malaysian telco scene with the first merger in the MVNO (Mobile Virtual Network Operator) market between Enabling Asia, the country’s first Mobile Virtual Network Aggregator MVNA), and MVNO Clixster Mobile Group Inc.

Clixster last year earned US$16 million (RM53 million) revenue, and projects US$9 million (RM30 million) this year.

Clixster may very well be a sleeping giant, mainly because one of its shareholders is Angkasa, the National Co-operative Organisation of Malaysia, the country’s apex cooperative which has 7,000 cooperatives under its wing with 8.4 million members [corrected].

Furthermore, in January this year, Clixster initiated the reverse takeover (RTO) of China Media Group Corporation, which is quoted on New York’s Over-the-Counter market (CHMD).

The idea of the exercise is to eventually grow Clixster to the stage where it graduates to the full Nasdaq board and is able to tap the US capital market for growth. Its name will be changed to Clixster Mobile Group soon.

READ ALSO: GNum out to bridge online and mobile communications

Clixster group chief executive officer (CEO) Noor Azlan Khamis, also one of its five shareholders, tells Digital News Asia (DNA) that the impending merger is the ideal approach to unlock the value in both organisations.

Operating individually, they just don’t have the necessary scale to get a better deal from the incumbent mobile network operators, much less eat into their market share, he noted.

This merger, when it happens, will see Enabling Asia founder Loke Yee Siong remain CEO, while Azlan remains group CEO [corrected].

And while Enabling Asia brings its NSP or Network Service Provision licence, its technical platform, and its commercial relationship with service provider U Mobile to the table; Clixster, by virtue of its large untapped customer base especially from Angkasa, will actually own a simple majority in the merged organisation.

Loke is unfazed at this reality, preferring to focus on the fact that the merger will result in both Clixster and Enabling Asia retaining their brands while enjoying the strengths the other brings to the table.

“We have our own platform, technical and go to market expertise that they don’t, which they can then bring to offer better value to their customers. On the other hand, partnering with them allows us to quickly make inroads into the government and semi-government business,” he says.

Operating since 2012, Enabling Asia has four MVNOs under its belt including Buzz Me (its own consumer brand), Prabhu Mobile, ECI Mobile, and Unicoms Mobile.

Clixster has four MVNOs as well, operating Clixster Mobile, Angkasa Mobile, Ameen Mobile and SR1M, while claiming a combined subscriber base of 300,000 users. It also has a device, payments and media business.

The impending merger between the two parties is made smoother by the fact that both share the same vision, Loke declares. “Domestically, both of us believe that the only way to compete is to consolidate all the MVNOs and become a virtual MVNO.”

Meanwhile, in terms of international vision, they both want to make sure roaming services are cheaper – mainly by partnering with an MVNO in another country which then issues a temporary SIM number to the traveller.

Post-merger, which they expect to happen in the first quarter, being an MVNA will remain their core business, with both stressing the large untapped market still out there.

“We are going to launch a co-branded MVNO with the Manchester United fan club, for example,” Azlan says to illustrate the untapped market they see in the Malaysian market.

Then there are the opportunities within the public sector, with Azlan sharing that they have a Letter of Intent from the Home Ministry to come up with a mobile-based monitoring system to pay Rela reservists right away after they have performed their duties.

“There are over a million Rela reservists. What’s to prevent the Home Ministry from perhaps wanting to offer them an MVNO service eventually?” poses Azlan, who started his career in 1993 with Asia Connect, Malaysia’s first dial-up ISP (Internet service provider).