Malaysia's Axiata Group is considering making an offer for Indonesia's Axis Telecom, and merging the company with its Indonesian subsidiary.
Three sources toldBloomberg that Axiata is considering the offer, with one indicating that the plan is motivated by a desire to secure more spectrum.
Axis is 84% owned by Saudi Telecom and 16% owned by Axiata's domestic rival Maxis Communications, and is reportedly valued at about $1 billion.
Another motivating factor behind the potential acquisition is what XL Axiata has called an “unsustainable” level of competition in Indonesia's crowded mobile market. Ten operators provide services in the market, creating pressure for a wave of consolidation.
According to the sources, the JV will provide mobile and online services in Indonesia. The nature of the business hasn't been finalized, but possible services include navigation and online shopping services.
The partners will reportedly each invest an initial $9.15 million in the venture.
SK Planet already operates music and video streaming services in the market through an existing joint venture with incumbent Telkom Indonesia.