Axiata, Sinarmas sign two Letters of Intent to advance strategic collaboration

• 1st LOI outlines joint initiatives leveraging the parties’ telecom ecosystems
• 2nd LOI reaffirms the merger of PT XL Axiata, Smartfren & Smart Telcom into PT XLSmart

Axiata Group Berhad and Sinar Mas have announced the signing of two letters of intent (LOIs) to explore and advance strategic collaborations at a ceremony attended by Malaysian prime minister Anwar Ibrahim and Indonesian president Prabowo Subianto.

The first LOI establishes a framework for detailed discussions on joint initiatives leveraging their telecommunications ecosystems. The collaboration will focus on high-growth areas such as advanced 5G solutions, enterprise services, digital infrastructure, and fintech innovations to support regional digital transformation.

Vivek Sood, group CEO of Axiata Group, stated: “These LOIs with Sinar Mas mark a pivotal step towards shaping Southeast Asia’s digital transformation. By harnessing the potential of 5G, enterprise solutions, and digital infrastructure, we aim to bridge the digital divide and drive sustainable growth across Malaysia, Indonesia, and beyond.

“We are grateful for the support of the Malaysian and Indonesian governments, whose forward-looking digital policies enable partnerships that align with national and regional agendas. Together, we are building a vibrant and inclusive digital ecosystem.”

Under the first LOI, Axiata and Sinar Mas will conduct market analyses, evaluate competitive landscapes, and identify unmet demands across priority markets. They will also explore strategic partnerships to incubate new businesses and solutions aligned with digital economy goals.

Franky Oesman Widjaja, chairman of Sinar Mas Telecommunications and Technology, remarked: “These LOIs with Axiata mark an exciting chapter in accelerating digital transformation across Malaysia and Indonesia. By unlocking synergies and fostering innovation, we aim to enhance connectivity, empower businesses, and drive regional economic growth.”

The second LOI reaffirms commitments outlined in the definitive agreements announced on 11 December 2024 regarding the proposed merger of PT XL Axiata Tbk, PT Smartfren Telecom Tbk, and PT Smart Telcom, forming PT XLSmart Telecom Sejahtera Tbk (XLSmart) in Indonesia. The merger, valued at over US$6.5 billion (RM1.46 trillion), is expected to enhance innovation, service quality, and digital connectivity while fostering a competitive market.

The LOI confirms both parties’ intent to work in good faith to meet conditions outlined in the agreements and explore synergies through strategies such as network sharing and asset-right/light models to maximise value and efficiency.

The merger is subject to regulatory and shareholder approvals and is expected to be completed in the first half of 2025, pending customary closing conditions. Updates will be communicated via official channels, including exchange announcements, regulatory disclosures, and company websites.