Ooredoo Group and CK Hutchinson announced both have entered into an exclusive non-legally binding memorandum of understanding, to merge their Indonesian units, a move to ramp up competition in the market.
In a statement, Qatar operator Ooredoo said the potential merger is in the “early stages” as it assesses the merits of a potential tie-up.
The exclusivity period to merge its brand Indosat with Hutchison 3 Indonesia is valid until April 30.
“As part of our corporate strategy, we regularly review our strategic priorities and market position across all of our operations and their contribution to the Ooredoo Group”, said Ooredoo.
Hong Kong-based CK Hutchinson said in a separate statement: “The potential transaction remains subject to, amongst others, satisfactory due diligence, agreement on terms, signing of definitive agreements and obtaining of all required corporate and regulatory approvals.”
The announcement comes after the Indonesian government passed a law enabling operators to share spectrum, a move to spur consolidation in the market, reported Reuters.
Johnny Plate, communications minister, said before the announcement, “consolidation is needed” for companies to prepare investments to kick start 5G deployment in Indonesia.
State-owned Telkomsel leads the Indonesia market followed by Axiata, Smartfren Telecom, and then Hutchinson 3 Indonesia, noted the news agency.