PETALING JAYA: Axiata Group Bhd and Sinar Mas jointly announced that shareholders of PT XL Axiata Tbk (XL Axiata), PT Smartfren Telecom Tbk and PT Smart Telcom (SmartTel) have formally approved the merger of the three companies, marking a significant milestone in Indonesia’s telecommunications sector.
The approval was secured following extraordinary general meetings held on Tuesday by XL Axiata, Smartfren and SmartTel. This followed prior in-principle regulatory approvals from Indonesia’s Ministry of Communication and Digital Affairs and the approval of the Indonesia Stock Exchange and the Financial Services Authority, further solidifying institutional support for the strategic consolidation.
The approval signifies the confidence of shareholders in the combined potential of XL Axiata and Smartfren, reinforcing their commitment to driving a more integrated, efficient, and innovative telecommunications industry. With the shareholders’ endorsement, XLSMART, the merged entity, will continue the important roles played by XL Axiata and Smartfren in Indonesia’s development via the critical telecommunications industry.
Combining XL Axiata’s extensive infrastructure and reach with Smartfren’s digital innovation, XLSMART is better able to serve consumers and businesses in the era of digitalisation.
With a subscriber base exceeding 94.3 million, annual projected revenue of 45.8 trillion rupiah, and an Ebitda of 22.5 trillion rupiah, XLSMART is well-positioned to lead the next phase of growth in Indonesia’s telecommunications sector. The landmark merger is set to realise significant cost synergies, with an estimated annual run-rate pre-tax synergies of US$300 million to US$400 million after the integration is completed.
Following the completion of the merger, Axiata Group and Sinar Mas will become the joint controlling shareholders, with each holding a 34.8% stake in XLSMART, with equal influence over its strategic direction and decisions.
To strengthen the collaboration beyond XLSMART, Axiata and Sinar Mas on Jan 28 signed letters of intent (LoI), at a ceremony witnessed by Prime Minister Datuk Seri Anwar Ibrahim and Indonesian President Prabowo Subianto at the Petronas Twin Towers in Kuala Lumpur.
The LoI laid the groundwork for deeper collaboration between the two companies, focusing on potential synergies in Malaysia, Indonesia, and Southeast Asia. The agreement envisioned joint efforts in advanced 5G solutions, enterprise services, digital infrastructure and fintech innovations, supporting the broader goal of accelerating digital transformation across the region. The shareholder approvals mark a critical step forward in realising that vision and advancing strategic cooperation between the two companies.
As part of the newly formed company’s leadership, Rajeev Sethi has been appointed president director and CEO, supported by an executive team that includes nine directors and nine commissioners, ensuring a well-balanced representation from both XL Axiata and Smartfren.
Sinar Mas Telecommunications & Technology chairman Franky Oesman Widjaja said: “We believe this consolidation is a crucial step towards creating a more robust telecommunications industry in Indonesia. By combining XL Axiata’s solid infrastructure with Smartfren’s customer-focused digital services, XLSMART will offer enhanced connectivity solutions that empower consumers and businesses while supporting the nation’s long-term digital aspirations. We are excited for the opportunity to drive meaningful progress for Indonesia’s digital economy, ensuring that our customers, partners, and stakeholders benefit from increased efficiency, broader coverage, and superior service quality.”
Meanwhile, Axiata Group CEO Vivek Sood said the merger marks a defining moment in Indonesia’s digital landscape.
“The confidence of our shareholders in approving this transaction underscores our vision to build a stronger, more resilient telecommunications entity that delivers value through scale, efficiency, and innovation. With XLSMART, we are poised to enhance customer experience, expand digital services, and contribute to the growth of Indonesia’s digital economy. This merger is not only about combining two businesses but about creating a new, forward-looking company that will set benchmarks in innovation, service quality, and operational excellence.
“We believe this business combination will allow for the improved financial health of the industry, and we are confident XLSMART will emerge as a formidable player – enabling us to significantly accelerate investments in digital infrastructure and innovation, and ultimately empower communities.”
Over the coming months, Axiata and Sinar Mas will work closely to align business operations, optimise network infrastructure, and explore new service offerings that capitalise on the strengths of the merged entity.
