XLSMART merger gains shareholder approval, setting stage for regional expansion

Shareholders of XL Axiata, Smartfren Telecom, and Smart Telcom have formally approved the merger of the three companies, setting a significant precedent in the regional telecommunications industry.

The move is set to cement XLSMART as a dominant force in the industry, combining XL Axiata's extensive infrastructure with Smartfren's digital innovation to drive greater efficiencies and enhanced connectivity.

The approval was secured following extraordinary general meetings of shareholders held on 25 March. This follows earlier regulatory approvals from Indonesia's ministry of communication and digital affairs, as well as clearances from the Indonesia Stock Exchange (IDX) and the Financial Services Authority (OJK).

Don't miss: Axiata, Sinar Mas seal merger plans before PM Anwar and president Prabowo

With this backing, XLSMART is poised to play a critical role in Indonesia's digital transformation, capitalising on a subscriber base exceeding 94.3 million, projected annual revenue of IDR 45.8 trillion (US$2.8 billion), and EBITDA of IDR 22.5 trillion (US$1.4 billion). The integration is also expected to generate run-rate pre-tax synergies of US$300 million to US$400 million annually post-merger.

Following completion, Axiata Group and Sinar Mas will each hold a 34.8% stake in XLSMART, ensuring equal influence over strategic direction and governance.

Rajeev Sethi has been appointed as president director and CEO of XLSMART, supported by a leadership team comprising nine directors and nine commissioners from XL Axiata and Smartfren.

Sethi, formerly CEO of Robi Axiata Bangladesh, brings a wealth of experience in transforming telecommunications businesses in emerging markets. Under his leadership, XLSMART will focus on expanding network coverage, enhancing service quality, and driving digital innovation in the evolving telecom landscape.

Beyond the merger, Axiata and Sinar Mas have laid the groundwork for deeper collaboration in Malaysia, Indonesia, and Southeast Asia.

On 28 January, the two companies signed agreements at a ceremony attended by Malaysian Prime Minister Dato' Seri Anwar Ibrahim and Indonesian President Prabowo Subianto at the Petronas Twin Towers in Kuala Lumpur. The agreements focus on advanced 5G solutions, enterprise services, digital infrastructure, and fintech innovation, reinforcing both companies' commitment to accelerating digital transformation in the region.

Franky Oesman Widjaja, chairman of Sinar Mas Telecommunications & Technology, highlighted the strategic importance of the merger: "We believe this consolidation is a crucial step toward 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."

"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," said Axiata Group CEO Vivek Sood.

Over the coming months, Axiata and Sinar Mas will work closely to align business operations, optimise network infrastructure, and introduce new service offerings that leverage the strengths of the merged entity.

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