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Indonesian govt to approve Axiata acquisition
by Cals Tue 13 Aug 2013, 22:04
Indonesian govt to approve Axiata acquisition
Business & Markets 2013
Written by Bernama
Tuesday, 13 August 2013 18:31
JAKARTA (Aug 13): The Indonesian government has indicated that it will give formal approval to Malaysian telecommunication operator, Axiata Group Bhd, to own a stake in PT Axis Telekom Indonesia, later this year.
The Communications and Information Ministry has given initial approval for the acquisition of Axis — a majority of which is owned by Saudi Telecom Co and Axiata Group through its Indonesian unit, PT XL Axiata — Indonesia's third-largest mobile phone operator.
"In principle, I have approved the (acquisition) plan involving XL Axiata and Axis," Communications and Information Minister Tifatul Sembiring was quoted as saying by English daily The Jakarta Post today.
Tifatul, however, pointed out that he would give the formal go-ahead after the Indonesian Telecommunication Regulatory Authority and the ministry's Directorate-General for Postal and Informatics Equipment submitted their joint review of the validity of the acquisition.
"I will be able to give my formal approval before year-end, since they will hand in the review sometime around August," he said.
The minister said the acquisition of Axis by XL Axiata would help level out competition among operators, as the market was overcrowded with 14 operators.
This, he said, has resulted in unhealthy competition, because the top three operators earned 92 per cent of industry revenue.
PT Telekomunikasi Selular, PT Indosat and XL Axiata have a combined market share of nearly 70 per cent, research by Frost & Sullivan shows.
The operators were previously engaged in price wars to win subscribers, and have to submit bids for frequency blocks auctioned off by the ministry.
The daily reported that XL Axiata's plan to acquire Axis will also consequently require the latter to return its frequency blocks to the ministry — instead of automatically consolidating them with the former's, as stipulated by the law, which bars operators from handing over blocks allotted to them, to other operators.
However, the ministry is deliberating whether the returned blocks should then be handed back to the post-acquisition entity, or put up for auction.
Business & Markets 2013
Written by Bernama
Tuesday, 13 August 2013 18:31
JAKARTA (Aug 13): The Indonesian government has indicated that it will give formal approval to Malaysian telecommunication operator, Axiata Group Bhd, to own a stake in PT Axis Telekom Indonesia, later this year.
The Communications and Information Ministry has given initial approval for the acquisition of Axis — a majority of which is owned by Saudi Telecom Co and Axiata Group through its Indonesian unit, PT XL Axiata — Indonesia's third-largest mobile phone operator.
"In principle, I have approved the (acquisition) plan involving XL Axiata and Axis," Communications and Information Minister Tifatul Sembiring was quoted as saying by English daily The Jakarta Post today.
Tifatul, however, pointed out that he would give the formal go-ahead after the Indonesian Telecommunication Regulatory Authority and the ministry's Directorate-General for Postal and Informatics Equipment submitted their joint review of the validity of the acquisition.
"I will be able to give my formal approval before year-end, since they will hand in the review sometime around August," he said.
The minister said the acquisition of Axis by XL Axiata would help level out competition among operators, as the market was overcrowded with 14 operators.
This, he said, has resulted in unhealthy competition, because the top three operators earned 92 per cent of industry revenue.
PT Telekomunikasi Selular, PT Indosat and XL Axiata have a combined market share of nearly 70 per cent, research by Frost & Sullivan shows.
The operators were previously engaged in price wars to win subscribers, and have to submit bids for frequency blocks auctioned off by the ministry.
The daily reported that XL Axiata's plan to acquire Axis will also consequently require the latter to return its frequency blocks to the ministry — instead of automatically consolidating them with the former's, as stipulated by the law, which bars operators from handing over blocks allotted to them, to other operators.
However, the ministry is deliberating whether the returned blocks should then be handed back to the post-acquisition entity, or put up for auction.
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