Malaysia-based telecoms group Axiata, which owns a majority stake in Indonesian cellco XL Axiata via Axiata Investments (Indonesia), is reportedly holding talks to acquire a smaller rival in a share-swap deal to help reduce operating costs and competition in its biggest market. Axiata chief executive officer Jamaludin Ibrahim told Reuters that the move comes as its business operations are adversely impacted by the ongoing COVID-19 pandemic. ‘Except for the biggest player [Telkomsel], I can tell you right now we are talking to all for some kind of an arrangement,’ the CEO told Reuters in an interview on 23 May, and though he stopped short of disclosing any names, TeleGeography notes that the companies under the spotlight could include Indosat Ooredoo, Smart Telecom (Smartfren), CK Hutchison’s 3 Indonesia (Tri) or Net1. ‘I can’t imagine buying two, and you don’t need to anyway,’ Jamaludin added before noting that Axiata Group had done due diligence last year, and information from that could be ‘partially’ useful if a deal were to materialise this year. Recall, Norway’s Telenor Group and Axiata Group held talks in 2019 over a potential non-cash combination of their telecom and infrastructure assets in Asia, in which the former would take a majority stake, but the talks broke down in September. ‘We are not ruling out’ further talks with Telenor, but at this point of time we are not discussing seriously with them,’ the CEO was cited as saying.
Further, Jamaludin stated that Axiata was also considering separate deals in Malaysia and Sri Lanka. ‘I hope before I retire [later this year], at least one country happens. Either Malaysia, Indonesia or Sri Lanka,’ he said. ‘COVID-19 makes it more a necessity to consolidate, even more than before, and therefore to discuss with all parties becomes quite imperative’.