And so in the next few weeks SingTel and Deutsche Telecom will likely form a holding company that will manage their respective assets in Asian cellular phone operators. The new holding company will provide SingTel with a back door to regional connectivity. It had tried but failed to buy into phone companies in Malaysia and Hong Kong, after losing its monopoly over mobile-phone services in Singapore two years ago. The need for new revenue streams has become more urgent because SingTel will give up its monopoly over fixed-line services and overseas calls next year, when newcomer StarHub starts operations. If the German giant buys into SingTel, the Singapore company will also gain access to new technology, management expertise and global connections.
Bigger deals are in the works.
DBS Bank has already bought companies in Singapore, the Philippines, Thailand and Hong Kong, and is keen to purchase more. Malaysia is the only hole in DBS's regional network. Or it can purchase a foreign bank with operations in Malaysia. The second alternative seems the most feasible. None of the major Singapore banks is willing to merge with DBS at this time and the foreign bank with the best fit, London's Standard Chartered Bank, is itself on an Asian acquisition binge.