Axiata said to weigh bid for Axis Telekom Indonesia

JAKARTA: Axiata Group Bhd, Malaysia’s largest mobile-phone operator, is evaluating a bid for PT Axis Telekom Indonesia, according to three people with knowledge of the matter.
Any offer for Axis would be made by Axiata’s Indonesian unit, PT XL Axiata, the people said, asking not to be identified as the information was private. Purchasing the Indonesian carrier would give XL Axiata the mobile-phone frequencies it needed to expand in South-East Asia’s most crowded wireless market, one person said.
Axis, majority owned by Saudi Telecom Co, is valued at about US$1bil (RM3.02bil), including debt, according to an estimate from Saudi Fransi Capital.
Malaysia’s Maxis Communications Bhd also holds a stake in the company.
Ten
operators compete for subscribers in Indonesia’s mobile market, the
second-highest number in Asia after India, in what XL Axiata on May 1
called an “unsustainable situation.” Buying spectrum would allow XL
Axiata to add services and coverage areas, after the company this month
reported that first-quarter profit had slumped by more than half to
315.5 billion rupiah (RM96.68mil) from a year earlier.
“There’s no information that I can share at this point of time,” XL Axiata president director Hasnul Suhaimi said in a text message response to questions from Bloomberg.
A spokeswoman for Kuala Lumpur-based Axiata declined to comment, while
representatives of Saudi Telecom, Axis and Maxis Communications weren’t
immediately available.
Any purchase of Axis would require
approval from the Indonesian government, which holds stakes in the two
largest telecom operators – PT Telekomunikasi Indonesia and PT Indosat – one person said.
XL
Axiata, with 46 million subscribers, would be “happy to play a role” in
the consolidation of Indonesia’s mobile telecom industry, Suhaimi said
on a May 1 conference call with investors.
“Ultimately, it might
become not even attractive to continue investing,” unless the industry
structure improved, he said, according to a transcript of the call.
Indonesia’s
three major operators, including XL Axiata, would benefit from
acquisitions, as eased competition would allow them to raise prices,
Riaz Hyder, an analyst at Macquarie Group Ltd, wrote in a report last month.
XL Axiata fell 1% to 5,150 rupees as of 2.10pm in Jakarta yesterday, taking this year’s decline in the shares to 9.7%.
The stock has underperformed the Jakarta Composite Index’s 21% gain this year. – Bloomberg
, and trades at a lower price-to-earnings multiple than Telekomunikasi Indonesia and Indosat, data compiled by Bloomberg show.
Saudi
Telecom owns 84% of Axis, while Maxis holds the remainder. Saudi
Telecom’s stake in Axis was valued at US$880mil, Saudi Fransi Capital
analyst Roy Cherry said in February. Saudi Telecom’s chief executive officer Khaled Al Ghuniem quit the parent company in March after less than a year in the post. – Bloomberg