MoCI rubber stamps XL Axiata’s Axis Telekom Indonesia takeover

2 Dec 2013

Indonesia’s Ministry of Communications and Information Technology (MoCI) yesterday gave its approval to local mobile operator PT XL Axiata’s plan to take control of fellow operator PT Axis Telekom Indonesia (Axis). In a release, the ministry said it had given its consent to the proposal, which would be followed by a dual-phase merger process – as outlined by both operators.

In September this year XL Axiata, a subsidiary of Malaysia’s Axiata Group Berhad and Indonesia’s second largest operator, signed a conditional sale and purchase agreement with Saudi Telecom Company (STC) and subsidiary, Teleglobal Investments (Teleglobal), to acquire their 95% stake in Axis for USD865 million. However, the MoCI has attached a number of terms and conditions to the deal, including the requirement that the enlarged entity hand back several blocks of mobile frequency spectrum. Ministry spokesman Gatot S Dewa Broto confirmed to The Jakarta Post that the pair must relinquish ‘two blocks numbering eight and twelve’ as soon as possible. As it stands, block eight is used by XL Axiata and block twelve by Axis. Both allocations are in the 2100MHz band, which are used for 3G services. The MoCI will decide which operators will qualify for reallocation of the said spectrum, with a tender due sometime in 2014. Shares in XL Axiata climbed to a six-month high in the wake of the ministry’s announcement.

Indonesia, Ministry of Communication and Information (MCI), XL Axiata