The government of Indonesia is likely to formally approve a move by Malaysian telecommunication operator Axiata Group, acting through its local unit XL Axiata, to acquire a majority stake in fellow operator PT Axis Telekom Indonesia (Axis) later this year, The Jakarta Post reports. As previously reported by CommsUpdate, the Ministry of Communications and Information Technology (MoCI) has given the thumbs up to XL Axiata’s plan to take control of Axis Indonesia, according to Axiata president Hasnul Suhaimi. The company has received ‘a letter of approval’ from the ministry concerning the takeover, although he concedes that the process has a ‘long way to go’ before it is completed. XL Axiata, 66.5% owned by Malaysia’s Axiata Group, is the country’s third largest mobile operator with approximately 49 million subscribers. Axis Indonesia meanwhile, is 80.1% owned by Saudi Telecom Company and has around 17 million users. Speaking in July this year, Hasnul said that both sides are still in the negotiation phase, but are confident that they will be able to secure a deal before signing the conditional sale and purchase agreement. Axis’ shares (including its debt) have been valued at around USD1 billion, with XL keen to acquire all of Axis’ assets, including its employees, brand, subscribers and frequencies. If successful, the combined Axiata-Axis entity would leapfrog the country’s current number two player – PT Indosat – which has around 59 million mobile customers.
Rival operators are however, concerned that the tie-up does not undermine or hamper the ‘cohesiveness’ of the local telecoms market and here, Communications and Information Minister Tifatul Sembiring has stressed that the formal go-ahead will only take place after the Indonesian Telecommunication Regulatory Authority (BRTI) and the ministry’s directorate general for postal and informatics equipment have submitted their joint review of the validity of the acquisition. ‘I will be able to give my formal approval before the end of the year, since they will hand in the review sometime around August,’ Tifatul said. It is understood that the government-led review will amongst other things, focus on the legality and the terms and conditions of the takeover. Its findings are expected to be submitted to Tifatul later this month.