Analysts: XL Axiata and Hutchison 3 merger to benefit Indonesian telco industry

02 October 2019 15:48

JAKARTA. The merger of PT XL Axiata Tbk (EXCL) and Hutchison 3 is believed to positively affect the Indonesian telecommunication industry.

As reported by Reuters on Tuesday (1/10), EXCL has received a serious and credible acquisition offer from Hong Kong-based telecommunication company CK Hutchison Holdings Ltd. If both parties agree on the offer, a deal will be signed in 2020.

Mandiri Sekuritas analysts Kresna Hutabarat and Henry Tedja said that the profitability of the Indonesian cellular telecommunication industry is currently under pressure from price competition for celluler internet services and increasing infrastructure costs. "The industry also needs to anticipate higher capital expenditure for the development of 5G network in Indonesia," Mr Hutabarat and Mr Tedja wrote in an official statement.

Axiata Investments Sdn Bhd is currently the majority shareholder of EXCL with a 66.36% stake, while the remaining 33.64% of the shares are owned by public investors. (KR/MS)

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