In Front Of The President Of The Republic Of Indonesia And The Prime Minister Of Malaysia, Axiata And Sinar Mas Technology Cooperation

Indonesian President Prabowo Subianto, Chairman of Sinar Mas Telecommunications and Technology Franky Oesman Widjaja, Chairman of Axiata Tan Sri Shahril Ridza Ridzuan, and Prime Minister of Dato' Seri Anwar Ibrahim. (Axiata)

JAKARTA Axiata Group Berhad (Axiata) and Sinar Mas announced the signing of two Memorandums of Understanding (MoU) to strengthen strategic collaboration in various fields. This signing took place at an event attended by the President of the Republic of Indonesia, Prabowo Subianto, and the Prime Minister of Malaysia, Dato' Seri Anwar Ibrahim, at Petronas Twin Towers, Kuala Lumpur.

The first Memorandum of Understanding will form the basis for further discussions regarding projects aimed at encouraging synergy in Malaysia, Indonesia, and the Southeast Asia region.

Axiata and Sinar Mas are committed to exploring opportunities for 5G technology development, business solutions, digital infrastructure, and financial technology innovation (fintech). All of these initiatives are expected to support digital transformation in the region.

Group Chief Executive Officer of Axiata Group, Vivek Sood, stated that cooperation with Sinar Mas is an important step in creating digital transformation in Southeast Asia.

"By deepening our partnership, we aim to take advantage of the potential 5G network, business solutions, and digital infrastructure to accelerate economic growth and bridge the digital gap in Malaysia, Indonesia, and the surrounding area," said Vivek Sood in a written statement, Tuesday, January 28.

Through the first MoU, Axiata and Sinar Mas will conduct an in-depth market analysis, evaluate the competition landscape, and identify market needs that have not been met. This collaboration will also focus on creating an innovation ecosystem and prioritizing strategic opportunities to increase digital economic growth.

Chairman of Sinar Mas Telecommunications and Technology, Franky Oesman Widjaja, called the signing of this MoU an encouraging new beginning for digital transformation in the region.

"We believe this collaboration will provide long-term value for stakeholders, strengthen connectivity, encourage innovation, and empower businesses and communities in the region," Franky said.

The second Memorandum of Understanding affirms Axiata and Sinar Mas' commitment to the definitive Agreement announced on December 11, 2024. The agreement includes the planned merger of PT XL Axiata Tbk, PT Smartfren Telecom Tbk, and PT Smart Telcom to become PT XLSmart Telecom Sejahtera Tbk (XLSmart).

This merger is expected to generate a combined value of pre-synergy of more than IDR 104 trillion (USD 6.5 billion) and an estimated proforma income of IDR 45.4 trillion.

This step aims to improve the quality of customer service, strengthen digital connectivity in Indonesia, and create a more competitive and healthy telecommunications market.

In this merger, Axiata and Sinar Mas plan to support XLSmart with optimal strategies such as a "hold and grow" approach, adoption of the "asset-right/light" model, and exploration of network sharing potential to increase operational efficiency.

The merger process still depends on the approval of regulators, shareholders, and the fulfillment of other general requirements. If all requirements are met, the completion of the merger is targeted to be completed in the first half of 2025.

The merger-related update will be announced through official channels, including stock exchange announcements and regulatory disclosures.