PETALING JAYA: Indonesia’s PT XL Axiata Tbk, which majority owned by Malaysia’s Axiata Group Bhd
expects growth to accelerate following its merger with PT Smartfren Telecom Tbk.
Last December, XL Axiata agreed to a merger with PT Smartfren’s parent PT Sinar Mas Group to form a new entity will be called PT XLSmart Telecom Sejahtera Tbk.
The deal is expected to be finalised by the first half of this year with both Axiata and Sinar Mas holding an equal 34.8% stakes in the new entity.
Maybank Securities Indonesia said, with the merger, the new entity would no longer face a spectrum bottleneck for 5G with an anticipated spectrum allocation of 137 megahertz to 152 megahertz.
“However, 5G deployment should be gradual and only in selected areas. Hence, we are not expecting a jump in capital expenditure,” Maybank Securities Indonesia said in a report.
The research house added that on Smartfren’s side, it could position itself as a fixed wireless access (FWA) operator to compete with Telkomsel’s Orbit and ad hoc networks commonly referred to Rukun Tetangga/Rukun Warga Net or RT/RW Net, as XL Axiata has plans to continue with its three brand strategies.
The brand strategies include XL Axiata’s own focus on targeting the middle-up income segment, while Axis targets the youth and middle-to-low income segments.
While the group has yet to decide on Smartfren’s position, Maybank Securities Indonesia said it thinks FWA is the missing product for XLSmartfren Telecom Sejahtera.
