Digi and Celcom, two of Malaysia’s “Big Three” telecommunication providers, are merging to become a new player in the country’s tech scene under the name Celcom Digi Berhad.

Axiata Group Berhad (“Axiata”), the parent company of Celcom, said that it is in talks with Digi’s parent company Telenor Asia (“Telenor”) to merge the operations of the two telcos.

Both Axiata and Telenor will be combining their resources and expertise in mobile networks to increase scalability and further develop IoT technology and AI. Both companies have also agreed to establish an Innovation Centre to drive the 4.0 Industrial Revolution and 5G adoption.

“In order to stay ahead of the curve, we must strengthen the foundation to offer continuous high-quality broadband, improve 4G connectivity and subsequently, support the acceleration of 5G rollout,” explained Axiata president and group CEO Datuk Izzaddin Idris.

“As we face fierce competition from global internet-based services and content providers, our stronger strategic position will allow for better negotiation levers in how we choose to compete and cooperate,” said Axiata chairman Tan Sri Ghazzali Sheikh Abdul Khalid.

After the merger, both companies will have equal ownership of the new entity, claiming a 33.1 percent stake each.

However, as of now, there are no considerations for future mergers of Celcom and Digi’s regional operations.