Malaysian multinational telecommunications conglomerate Axiata will be acquiring a 66.03% stake in one of Indonesia's biggest cable TV operators and fixed broadband internet provider, Link Net, for about $604 million, paving the way for expansion in the archipelago's untapped fixed broadband market.
In a filing with the bourse, the group said its indirect wholly-owned subsidiary Axiata Investments (Indonesia) and PT XL Axiata Tbk, an indirect subsidiary of the group, have entered into a conditional share purchase agreement with Asia Link Dewa Pte Ltd (ALD) and PT First Media Tbk (FM) to acquire the 1.82 billion shares in Link Net.
Link Net said the acquisition was subject to several conditions set out in the agreement and regulations.
"The successful completion of the transaction will provide significant opportunities for Link Net together with our new partners, to provide converged fixed-line broadband and mobile service propositions to both our residential and enterprise clients," President Director and Chief Executive Officer (CEO) of Link Net Marlo Budiman, said in the statement.
Link Net commenced its commercial operations in 2000 and has since grown to be among the leading providers of high-speed broadband and cable TV in Indonesia, reaching 2.8 million homes across 23 cities with a subscriber base of approximately 860,000.
Based on independent market research, Indonesia is one of the most attractive fixed broadband markets globally, significantly underpenetrated at 13.4% in terms of household penetration. It is also one of the fastest-growing broadband markets in the world with fixed connections poised for significant expansion at a compound annual growth rate of approximately 14.4%.
Furthermore, household penetration is expected to increase to 27.5% by 2026, driven by a growing addressable market, escalating data use, and the robust growth in Indonesia’s disposable income per capita.
Axiata’s President & Group CEO, Dato' Izzaddin Idris said: "By leveraging the strengths of our telco business from XL Axiata and Link Net’s broadband and connectivity solutions, we look forward to delivering compelling customer-focused converged solutions for the home and enterprise segments as Indonesia continues to advance its digital economy."
