XL Axiata to form JV with Indosat Ooredoo
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Indonesia’s XL Axiata has revealed it will enter a joint venture with Indosat Ooredoo to provide consultancy services in future network collaboration between the two operators.
The JV, PT One Indonesia Synergy, will be 50-50 owned by the two companies.
In a statement to the Bursa Malaysia, XL parent Axiata Group said it is expected that the joint venture will “provide consultancy services in future network collaboration. The transaction parties are in the process of jointly exploring the possibility of entering into such a collaboration.”
XL Axiata and Indosat Ooredoo agreed in January to share 4G infrastructure in several cities as a possible first step towards the long-discussed plans to form such a network sharing agreement.
Indonesia’s telecom ministry has also been pressuring the nation’s ten mobile operators to merge or jointly deploy networksto address crowding in the market, although this mainly applies to the smaller mobile operators struggling to compete with Indosat, XL and rival Telkomsel.
The stock market statement adds that the forming of the JV is not expected to have a material impact on the group’s financial results for the current year.
Questions & Answers
Q.What is the primary purpose of the new joint venture between XL Axiata and Indosat Ooredoo?
What is the primary purpose of the new joint venture between XL Axiata and Indosat Ooredoo?
The joint venture, PT One Indonesia Synergy, is established to provide consultancy services. These services will support future network collaboration between XL Axiata and Indosat Ooredoo, as they explore deeper sharing agreements.
Q.Which entities will own the newly formed joint venture, PT One Indonesia Synergy?
Which entities will own the newly formed joint venture, PT One Indonesia Synergy?
PT One Indonesia Synergy will be equally owned by the two participating companies. XL Axiata and Indosat Ooredoo will each hold a 50% stake in the joint venture, making it a 50-50 ownership structure.
Q.Has there been any previous collaboration between XL Axiata and Indosat Ooredoo?
Has there been any previous collaboration between XL Axiata and Indosat Ooredoo?
Yes, the two operators agreed in January to share 4G infrastructure in several cities. This initial arrangement was seen as a potential first step towards their long-discussed plans for a more comprehensive network sharing agreement.
Q.Will this joint venture significantly affect XL Axiata parent company's financial results this year?
Will this joint venture significantly affect XL Axiata parent company's financial results this year?
According to the stock market statement, the formation of this joint venture is not expected to have a material impact on the group's financial results for the current year. It suggests a minor financial implication.
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