AIMS Group Acquires Jaring despite Unhealthy Market

AIMS has also acquired Jaring’s network assets and customer contracts related to data centre, broadband & access, cloud & managed services

The AIMS Group, Southeast Asia’s leading carrier-neutral data services provider, has announced that it has secured the bid to acquire the data centre and network-related customer assets of Jaring Communications Sdn Bhd (‘Jaring’).

Under the acquisition, AIMS will also attain the rights to Jaring’s IPv4 Addresses and all of Jaring’s existing customers related to data centre, broadband and access, cloud and managed services.

The estimated total value of these unexpired contracts is more than RM50 million.

AIMS Group Chief Operating Officer Mohammad Azman says: “AIMS was awarded Jaring’s assets based on a balance of many factors; in terms of price, product portfolio, experience and skilled resources to fast track the necessary migrations between AIMS and the acquired Jaring operations.”

He also highlighted the data centre would also leverage its unique ‘carrier neutral’ position to ensure smooth migration of services for Jaring’s customers.

Price wars

Earlier on 8 May, 2015, Jaring was placed into liquidation on High Court order, with KPMG Deal Advisory Sdn Bhd (KPMG) tasked to head the liquidation with the objective of securing the ‘best deal’ for Jaring and its creditors.

Azman draws example of the demise of the country’s first Internet Service Provider (ISP) as a reality check on the current unhealthy state of the local data centre market.

“Just over the last few months, we have seen both Patimas and Jaring face liquidation and their customers facing operational risk and being forced to migrate their infrastructure to alternative service providers. This actually marks a worrying trend, which can be directly attributed to the high number of players in the market – that is forcing many services providers to move into a price war to attract customers.”

He says that while the price wars may seem as benefitting end customers, it is both the service providers and their customers that will be suffering in the longer run. “This imbalance caused by oversupply of space in the Malaysian data centre industry and depressed price levels is driving out some of the players, forcing some to shut down their operations.”

However, despite the cut throat situation, Azman assures that with the right business model, strategic positioning and partnerships, “the AIMS Group will continue to display financial resilience and is well positioned to continue growing its revenue and market share and expand its data centre footprint both locally and within the region”.

 As it is, AIMS’ data centre space located at Menara AIMS in the heart of Kuala Lumpur, is currently almost fully 100 percent utilised. In order for cater to its newly acquired assets, such as Jaring, AIMS plans to add another 10,000 square feet of space to its Kuala Lumpur facility. Additionally, AIMS also operates data centres in Cyberjaya, Johor, Singapore, Penang and Sabah. 

“The Group’s decision to selectively acquire Jaring’s assets was carefully deliberated upon.  We are very confident that AIMS will be able to optimise the purchase of assets from Jaring for our customers, as well as for the betterment of the data centre sector in Malaysia,” Azman concludes.