Axiata likely to get approval to buy Axis

Dylan Bushell-Embling
14 Aug 2013

Malaysia's Axiata may get Indonesian government approval for a plan to buy control of PT Axis Telekom and merge it with Indonesian subsidiary PT XL Axiata.

Indonesia's communications ministry has given in-principal initial approval to the merger plan, the Jakarta Post reported, citing Communications and Information Minister Tifatul Sembiring.

But regulator BTRI and a communications ministry directorate must first complete a joint review of the legality and validity of the acquisition, so the Minister does not expect to be able to give formal approval until the end of the year.

XL Axiata and rivals PT Telkomsel and PT Indosat have a combined share of nearly 70% of the market. But Titaful believes that the acquisition could help not hinder competition.

Indonesia's mobile market is overcrowded, with 14 operators jostling for subscribers, yet 92% of industry revenues go to the top three operators. Reducing the number of entrants could thus be healthy for competition, at least in the short term.

Axiata was first revealed to be considering an offer for Axis Telecom in May. XL Axiata has publicly expressed concerns over the “unsustainable” level of competition in the Indonesian telecom sector.

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