Axiata to acquire Indonesia's Axis

Malaysian operator group Axiata has announced the acquisition of a 95 per cent stake in Indonesian operator and subsidiary of Saudi player STC, Axis. Axiata’s own Indonesian subsidiary, PT XL Axiata (XL), has entered into a conditional sale and purchase agreement with Axis. The agreement will enable XL to provide better network quality to customers at a lower cost, the firm said.

Axiata added that it has valued Axis at $865m in total, on a cash-free and debt-free basis, and that the acquisition is still subject to all applicable regulatory approvals, XL shareholders’ approval at an Extraordinary General Meeting of Shareholders and the retention of spectrum.

According to Axiata, over 65 million customers will immediately benefit from the superior quality of service and wider coverage as a result of the deal. It added that the deal consolidates the industry further and “paves the way for more prudent, growth focused expansion with a more efficient capex profile”.

It also supports the government’s national broadband objective and provides additional spectrum capacity to XL in order to enhance QoS and improve XL’s asset utilisation, particularly on XL’s towers and network equipment, the firm said, with tangible reduction in capex and opex spend.

“With the acquisition of AXIS, XL will reinforce its leadership in the Indonesian telecommunications industry with strong traction in mobile data services,” said president director of XL, Hasnul Suhaimi.

“I believe all industry participants are in agreement that the industry must consolidate. This will be driven by companies like XL who have the will and ability to accelerate the development of high quality communication services in Indonesia.”

He added that XL is committed to investing in the next generation of mobile technologies and to bring back the broader industry ecosystem to healthier economics.

Axiata has controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia as well as strategic stakes in India and Singapore.

President and group CEO of the group Dato’ Sri Jamaludin Ibrahim commented: “We are a long term investor and the acquisition is in line with our strategy of continued investment in every country we operate in and supporting in-market consolidation where it benefits all parties.

“We are confident we can successfully execute the integration as we did with Hello and Smart in Cambodia as well as Suntel and Dialog in Sri Lanka. Both acquisitions saw smooth and successful integration both strategically and financially.”