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Axiata and Axis could create Indonesian second-place operator

Indonesia’s third-largest operator XL Axiata could soon move into second place if negotiations to acquire rival Axis Telekom are successful.

However, talks are ongoing and the companies have yet to sign a conditional sale and purchase agreement.

Axis is the fifth-largest operator in Indonesia with 16.9 million subscribers. Combining this base with Axiata’s 47.9 million would catapult the resulting entity into second place with 64.8 million subscribers. This would surpass current number two Indosat, which has 61 million, although market-leading Telkomsel would maintain a significant lead with 123 million.

The potential deal has already received the approval of the country’s Ministry of Communications and Information. Axis is reportedly valued at around $1 billion. The operator is majority owned by the Saudi Telecom Company; XL Axiata meanwhile is a subsidiary of Malaysian operator Axiata.

Indonesia’s market is highly competitive and the top three operators dominate; between them they have a 92% market share by revenue. Communications and Information Technology Minister Tifatul Sembiring has encouraged consolidation to counter this.

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