Malaysian telecommunications firm Axiata Group Berhad and Indonesian conglomerate Sinar Mas said shareholders of PT XL Axiata Tbk, PT Smartfren Telecom Tbk, and PT Smart Telcom have formally approved the merger of the three companies into XLSMART.
The approval signifies the confidence of shareholders in the combined potential of XL Axiata and Smartfren, reinforcing their commitment to driving a more integrated, efficient, and innovative telecommunications industry, Axiata said in a statement on Wednesday.
With this shareholders endorsement, XLSMART will continue the important roles played by XL Axiata and Smartfren in Indonesia’s development via the critical telecommunications industry.
Combining XL Axiata’s extensive infrastructure and reach with Smartfren’s digital innovation, the statement highlighted that XLSMART is better able to serve consumers and businesses in the era of digitalization.
With a subscriber base exceeding 94.3 million, annual projected revenue of IDR 45.8 trillion ($2.76 billion), and an earnings before interest, taxes, depreciation, and amortization (EBITDA) of IDR 22.5 trillion ($1.35 billion), it noted XLSMART is well-positioned to lead the next phase of growth in Indonesia’s telecommunications sector.
The landmark merger is also set to realize significant cost synergies, with an estimated annual run-rate pre-tax synergies of $300 to $400 million post integration completion.
Following the completion of the merger, Axiata Group and Sinar Mas will become the joint controlling shareholders, with each holding a 34.8 percent stake in XLSMART, with equal influence over its strategic direction and decisions.
To strengthen the collaboration beyond XLSMART, Axiata and Sinar Mas had in January signed two letters of intent (LOI’s) which laid the groundwork for deeper collaboration between the two companies, focusing on potential synergies in Malaysia, Indonesia, and Southeast Asia.
The agreement envisioned joint efforts in advanced 5G solutions, enterprise services, digital infrastructure, and fintech innovations, supporting the broader goal of accelerating digital transformation across the region.
Thus, the shareholder approvals mark a critical step forward in realizing that vision and advancing strategic cooperation between the two companies.
As part of the newly formed company’s leadership, Rajeev Sethi has been appointed as President Director and Chief Executive Officer, supported by a robust executive team that includes nine directors and nine commissioners, ensuring a well-balanced representation from both XL Axiata and Smartfren.
According to the statement, Sethi has extensive and successful experience in transforming telecommunications companies in emerging markets that will help XLSMART to realize its synergy values, and was previously the Chief Executive Officer at Robi Axiata Bangladesh.
The integration of these leadership teams also reflects the company’s focus on operational excellence, strategic growth, and synergy-driven transformation.
XLSMART will focus on expanding network coverage, enhancing service quality, and driving digital innovation, while also unlocking opportunities in mobile broadband, enterprise services, and emerging digital technologies to meet the evolving needs of Indonesia’s telecommunications market.
The merged entity will combine Axiata’s regional expertise and deep experience in managing integrated operations with the local knowledge and established presence of Sinar Mas, creating a larger, financially robust organization.
Franky Oesman Widjaja, Chairman of Sinar Mas Telecommunications and Technology, emphasized the significance of this merger in strengthening Indonesia’s digital economy.
“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,” he said.
Meanwhile, Vivek Sood, Group Chief Executive Officer of Axiata Group, highlighted this merger marks a defining moment in Indonesia’s digital landscape.
“The confidence of our shareholders in approving this transaction underscores our vision to build a stronger, more resilient telecommunications entity that delivers value through scale, efficiency, and innovation,” he said.
With XLSMART, he said the firm is poised to enhance customer experience, expand digital services, and contribute to the growth of Indonesia’s digital economy.
“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,” he added.
According to the statement, over the coming months, Axiata and Sinar Mas will work closely to align business operations, optimize network infrastructure, and explore new service offerings that capitalize on the strengths of the merged entity.
With XLSMART, Axiata and Sinar Mas reaffirm their commitment to fostering stronger corporate partnerships that drive innovation, support national digital agendas, and contribute to Southeast Asia’s growing role as a global digital powerhouse.
Axiata inks deals with Sinar Mas to advance digital solutions in Southeast Asia