XL Welcomes Approval from the Ministry of Communication and Informatics for M&A with AXIS
JAKARTA, December 2, 2013 – Axiata Group Berhad's (Axiata) Indonesian subsidiary, PT XL Axiata Tbk. (XL), today announced that it has received the Ministry of Communication and Informatics' (MoCI) approval to commence its Merger and Acquisition (M&A) with PT Axis Telekom Indonesia (AXIS), which was officially announced on 29 November of this year. MoCI's approval letter is affirmation that the government supports the consolidation efforts that will lead to a better and more sustainable industry.
The regulator's approval for this M&A plan will result in a consolidation in the Indonesia market and allow XL to overcome spectrum resource constraints it currently faces as well as provide additional capacity for service growth that will benefit XL and AXIS customers.
XL remains committed to supporting the government's programme in realizing the National Broadband Plan while also continuing to improve its own customer service quality and significantly maximizing its network for 2G and 3G. From this merger, both XL and AXIS customers will be able to enjoy better telecommunication services and a wider network reach. XL will also improve its asset utilization, especially for XL BTS towers and network equipment – with a significant reduction in future capital expenditure (capex) and operational expenditure (opex).
A key purpose of the merger was to acquire additional spectrum, especially to support the expansion and quality of voice and data services. Under the terms agreed for the merger XL will retain all AXIS" 15 MHz spectrum in 1800 MHz. XL will however, return a a block of spectrum, 10MHz of the 2100 MHz range currently used for 3G. This decision takes into account that XL had already successfully secured an additional tranche of 2 x 5MHz in 2100 MHz bringing its total to 15MHz for 3G services. .
President Director of XL Hasnul Suhaimi said, “We are delighted and thank the government for this strategic decision on the part of the regulator, who has given their blessing for our M&A plan with AXIS. This is a very important milestone in our consolidation journey and we believe we remain on track to finalize this process. The regulator's approval is a highly positive step in the continued development of our company's business, the industry, and for consumers.”
“We respect and will abide to the government's decision which we believe is for the best interests of our industry. We are confident that this is the optimal decision for our business development and expansion,” added Hasnul.
President & Group Chief Executive Officer of Axiata, Dato' Sri Jamaludin Ibrahim, added “We welcome the Indonesian Government's approval on the merger which is a significant step towards a sustainable Indonesia telecommunication industry. With the approval we can now move on to the next important task, that of a successful integration between XL and Axis.”
Moving forward, XL will finalise all the necessary steps to meet the regulatory requirements which includes obtaining approvals from the relevant regulatory bodies as well as XL shareholders through an EGM (Extraordinary Shareholders Meeting).
Axiata is one of the largest Asian telecommunication companies. Axiata has controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia with significant strategic stakes in India and Singapore.
The Group's mobile subsidiaries and associates operate under the brand name “Celcom” in Malaysia, “XL” in Indonesia, “Dialog” in Sri Lanka, “Robi” in Bangladesh, “Smart” in Cambodia, “Idea” in India and “M1” in Singapore.
The Group's, including its subsidiaries and associates, has close to 230 million mobile subscribers in Asia. The Group revenue for 2012 was USD5.7 billion. The Group provides employment to over 20,000 people across Asia. Axiata's vision is to be a regional champion by 2015 by piecing together the best throughout the region in connectivity, technology and talent, uniting them towards a single goal: Advancing Asia
Axiata was awarded the Frost & Sullivan 2009, 2010, 2011, 2012 and 2013 Asia Pacific ICT Award for Best Telecom Group and the Telecom Asia Best Regional Mobile Group 2010 and 2011 for its operations in multiple Asian markets.