The case of Maxis – U Mobile merger
The rumour mill is back spinning with the story of a merger between Maxis Bhd and U Mobile Sdn Bhd.
Rumors of a merger between Maxis Bhd and U Mobile Sdn Bhd are once again circulating in the industry. While this is not the first time such a story has been reported, the potential impact on Malaysia's telecom sector has drawn market attention. A combined Maxis-U Mobile entity would surpass CelcomDigi Bhd as the country's largest mobile operator by subscribers.
Maxis is currently valued at RM27.9 billion, while CelcomDigi is valued at approximately RM1 billion more. Following the story's release on October 28, Maxis' share price dropped by 3.8% to RM3.51, marking the largest intraday decline since June. Shareholders' negative reaction may stem from the dilutive effect a merger would have on Maxis' shares, depending on the valuation of U Mobile.
The value of U Mobile has been a subject of debate. If the merger were to occur, Maxis would gain access to U Mobile's second 5G network and the 100MHz block within the 3.5Ghz and 3.6Ghz bands. Given Malaysia's dual network model, this asset could be valuable. However, developing a 5G network is an expensive endeavor, with one site costing around RM200,000, not including equipment. The cost might not be justified if the burden of investment is not shared among operators, as ARPU has been declining in recent years.
Maxis' postpaid ARPU declined 1.1% quarter-on-quarter in the second quarter of 2026, while CelcomDigi's declined by 4.5%. Customers appear unwilling to pay more for data. If an MNO wants to invest in a network, it must grow its customer base significantly, which could be the reason behind the resurgence of the Maxis-U Mobile merger speculation.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
