Malaysian operator group Axiata may attempt to acquire its Indonesian rival PT Axis Telekom. Combining these assets with Axiata’s Indonesian subsidiary, XL Axiata, would create the second largest operator in the country as well as easing the market’s fierce competition.
Currently at number three in the Indonesian mobile market, XL Axiata had 49 million subscribers at the end of Q1 2013. PT Axis Telekom has 16 million, putting it in fifth place. Their joint subscriber total would only be exceeded by market leader Telkomsel’s 120 million subscribers.
Neither Axiata now Axis have acknowledged that a deal is being discussed. Saudi Telecom is the majority shareholder in Axis with an 84% holding; the remainder is owned by another Malaysian group, Maxis.
The potential deal would allow Axiata to expand using the additional spectrum that it would gain. In addition, by removing competitors from the fray, operator consolidation tends to ease price wars.
Axiata’s profits fell by over 50% in the first quarter of 2013 to IDR315.5 billion ($32 million).