Malaysia’s biggest wireless carrier Axiata Group and Indonesian conglomerate PT Sinar Mas Group have revived talks that could lead to a merger of their telecommunications operations in Indonesia, according to people familiar with the matter.

The owners of PT XL Axiata and PT Smartfren Telecom are working with advisers to help weigh a potential transaction, the people said, asking not to be identified because the matter is private. Other options under consideration could include network-sharing agreements and partnerships, the people said.

XL Axiata shares have climbed about 18 per cent this year, valuing the firm at US$2.2 billion. Smartfren’s stock has dropped about 18 per cent, valuing the company at about US$1.2 billion.

Deliberations are preliminary and there is no certainty that any deal will take place, the people said. Smartfren president director Merza Fachys said he would wait and see on the progress of talks, while a representative for Sinar Mas referred the request to Smartfren. A representative for XL Axiata said they could not comment on speculation. 

Axiata is always on the lookout for collaborations and strategic partnerships, and hopes to grow sustainably throughout its geographic footprint, a spokesperson said.

The renewed talks between Axiata and Sinar Mas would follow other unsuccessful attempts in previous years, Bloomberg News has reported.

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XL Axiata had 58 million subscribers as at June 30, according to its latest financial presentation. Axiata owns about 66 per cent of the firm. Smartfren, a unit of Sinar Mas, had 36 million customers as at the end of 2022, according to its annual report.

The Indonesian telecommunications market has recently been consolidating. Last year, CK Hutchison Holdings and Qatar’s Ooredoo merged their Indonesian telecom businesses in a US$6 billion transaction as they sought to fend off competition in South-east Asia’s biggest market by subscribers. BLOOMBERG