KUALA LUMPUR (Dec 6): Axiata Group Bhd has embarked on a plan to shift towards becoming a ServeCo and a FibreCo via the structural transformation of its Indonesian subsidiaries, XL Axiata and Link Net.

In a statement on Wednesday, the telecommunications and digital conglomerate said that both of its Indonesian subsidiaries had reached non-binding agreements to transfer Link Net’s fixed broadband business, including its 750,000 customers, to XL Axiata, and to roll out an additional two million new homes passed by Link Net.  

Upon completion, XL Axiata will leverage Link Net’s extensive fibre optics network with minimal investment, and become the second largest fixed broadband provider in Indonesia with one million customers. Meanwhile, Link Net will be able to concentrate on its network development, and become a leading wholesale FibreCo, with plans to invite investors to partner with it in the future.

Axiata Group said that XL Axiata and Link Net will proceed to set out a binding agreement for the terms, which will be carried out in compliance with prevailing regulations, including that of the Indonesian Financial Services Authority related to affiliated transactions and material transactions.

The group added that through the joint agreement, the Indonesian community will be able to access premium-quality fixed-broadband and first-class convergence services, which will support the government’s objective of promoting digitalisation and technological advancement in the country.  

Axiata group chief executive officer cum managing director Vivek Sood said with strategic priorities clearly outlined, Axiata Group will drive performance improvements and accelerate profitable growth across Indonesia and other geographic footprints to deliver on the full potential of the group's digital telcos, digital business and infrastructure segments, supported by focused capital allocations.

Earlier on June 22, the group reported that it had completed the acquisition to combine 66.03% equity interest together with XL Axiata in Link Net for approximately RM2.63 billion. With this acquisition, Link Net and XL Axiata will be well positioned to leverage immediate synergies through their combined positions in wireless communications services, sharing of backbone and transmission networks, and extensive relationships with customers in Indonesia. 

At the time of writing on Wednesday, Axiata Group shares traded five sen or 2.07% lower at RM2.37, valuing the group at RM21.75 billion.