The Indonesian anti-monopoly authority Komisi Pengawas Persaingan Usaha (KPPU) has approved the proposed merger of the country’s second largest cellular operator by subscribers, XL Axiata, with smaller rival Axis Telekom. The green light from the KPPU is the last regulatory hurdle needed for the deal to proceed, with both companies’ shareholders plus other Indonesian regulators already having approved the takeover. In December 2013 the country’s Ministry of Communications and Information Technology (MoCI) agreed to the transaction going ahead on the condition that the enlarged entity hand back several blocks of 2100MHz mobile frequency spectrum.
In September 2013 XL Axiata, a subsidiary of Malaysia’s Axiata, signed a conditional sale and purchase agreement with Saudi Telecom Company (STC) and STC’s subsidiary Teleglobal Investments to acquire the latter’s 95% stake in Axis for USD865 million. XL Axiata has announced that USD500 million of the acquisition price will come from its Malaysian parent, while the remainder will be sourced via bank loans. The merged Axiata/Axis will have a combined base of more than 77 million subscribers, equivalent to around 24% of the total mobile market, but still well behind market leader Telkomsel which claims over 40% of all users.