Malaysia – Axiata Group Berhad, a telecommunications firm, has recently announced that it has already formalised its plans to partner with Sinar Mas Group. This collaboration is designed to advance digital solutions in Malaysia and Indonesia.
In a recent statement, the company shared that said initiative was further solidified through the signing of two Letters of Intent (LOIs) to promote strategic collaborations.
According to them, the first LOI establishes a strong framework for in-depth discussions on specific projects, fostering greater collaboration and potential synergies across both countries and Southeast Asia.
This enables both companies to collaborate on detailed market analysis, examine competitive dynamics, and pinpoint untapped opportunities in key markets. They will also evaluate their respective strengths to determine key opportunities and develop optimal operating models for market entry.
Additionally, the firms plan to drive strategic partnerships to incubate business solutions that align with digital economy initiatives at both national and regional levels.
Meanwhile, the second LOI reinforces shared commitments amongst both organisations detailed in the definitive agreements announced on December 11, 2024, to move forward with the planned merger of PT XL Axiata Tbk, PT Smartfren Telecom Tbk, and PT Smart Telcom, forming PT XLSmart Telecom Sejahtera Tbk (XLSmart) in Indonesia.
This underscores their mutual intent to this landmark transaction, which will position XLSmart with a combined pre-synergy enterprise value exceeding IDR 104 trillion ($6.5b). Said partnership aims to boost innovation, elevate service quality, and expand digital connectivity while contributing to a dynamic and competitive market in Indonesia.
Moreover, the LOI allows both parties to work together in good faith to meet the agreed conditions outlined in the definitive agreements, ensuring the smooth transaction process. It further reflects their intention to explore and capitalise on synergies that emerge from integrating their businesses.
In addition to this, the parties intend to guide XLSmart in determining the best strategic integration paths, such as the “hold and grow” strategy, leveraging an “asset-right/light” framework, and evaluating network-sharing possibilities to optimise value and efficiency.
Vivek Sood, group chief executive officer at Axiata Group, said, “These LOIs with Sinar Mas represent a pivotal step in advancing regional collaboration to shape Southeast Asia’s next wave of digital transformation and advance services in high-growth areas.
“By deepening and reaffirming our ongoing partnership with Sinar Mas, we aim to harness the transformative potential of 5G, enterprise solutions, and digital infrastructure to drive sustainable economic growth and bridge the digital divide across Malaysia, Indonesia, and beyond,” he also stated.
Sood then continued, “We deeply appreciate the steadfast support of the governments of Malaysia and Indonesia, whose forward-looking policies on connectivity and digital inclusion have set a strong foundation for such partnerships.”
“By aligning our shared ambitions with national and regional digital economy agendas, we are laying the groundwork for a vibrant and inclusive digital ecosystem that delivers transformative services, empowers businesses, and enriches lives,” he explained.
Franky Oesman Widjaja, chairman of Sinar Mas Telecommunications and Technology, remarked, “These two LOIs signed today with Axiata represent an exciting chapter in our shared mission to accelerate Malaysia and Indonesia’s digital transformation.”
“We are confident in our ability to unlock synergies, deliver long-term value for stakeholders, and make a meaningful impact on the region’s digital economy by enhancing connectivity, fostering innovation, and empowering businesses and communities. Sinar Mas is keen to collaborate with Axiata to explore new innovative opportunities while supporting Malaysia and Indonesia’s vision of a thriving and inclusive digital economy. Together, we aim to set a benchmark for regional collaboration, creating a more interconnected and prosperous future,” concluded Widjaja.
