XL Axiata and Smartfren Join Forces to Become XLSmart, Here’s the Impact on Users

Kapanlagi.com - The Indonesian telecommunications industry is once again shaking the market with shocking news: two giants, XL Axiata and Smartfren, have now united into a new entity known as XLSmart! This merger is predicted to have an extraordinary impact on customers, especially regarding internet package prices and the quality of services offered.

Will we witness increasingly fierce competition among mobile operators, which in turn will benefit consumers? XLSmart is committed to enhancing service quality with a wider reach and higher internet speeds thanks to the merger of solid infrastructures.

However, there is one big question lingering in our minds: will this merger result in lower internet package prices, or will it have the opposite effect?

Follow our in-depth analysis to find out how the merger of XL and Smartfren will affect customers and the telecommunications industry in the country.

1. XLSmart Born: Two Giants Unite

PT XL Axiata Tbk (EXCL) has officially merged with PT Smartfren Telecom Tbk (FREN) and PT Smart Telecom (SmarTel), giving birth to a new entity named PT XLSmart Telecom Sejahtera Tbk (XLSmart).

With this strategic move, XLSmart aims to become one of the giants in the Indonesian telecommunications industry, ready to compete fiercely with two other major players, Telkomsel and Indosat.

Vivek Sood, Group CEO & Managing Director of Axiata, emphasized that this merger aims to create a robust mobile operator that will transform the mobile market landscape in Indonesia into a competitive arena with three main forces.

With projections of around 94.5 million customers commanding a 27% market share, XLSmart now stands on the brink of serious challenges for Indosat and Telkomsel, who are still leading the market.

2. Positive Impact for Customers: Faster Internet, Wider Coverage

XLSmart is ready to bring a revolution in service quality for its customers! By leveraging advanced combined infrastructure, XLSmart will significantly expand network coverage and increase capacity.

This is certainly a breath of fresh air for customers, especially those living in areas with weak signals or limited internet access, as they can now enjoy higher internet speeds and more stable connections.

3. Internet Package Prices: Cheap or Expensive?

After a merger that shook the telecommunications industry, one big question arises: what will happen to internet package prices in the future? Will they become more affordable thanks to operational efficiencies, or will they soar due to reduced competition?

Niko Margaronis, equity research analyst at BRI Danareksa Sekuritas, is optimistic that XLSmart will benefit from economies of scale, similar to Indosat Ooredoo Hutchison, which successfully improved EBITDA margins post-merger.

However, Sukarno Alatas, head of research at Kiwoom Sekuritas, warns that competition among the three operators will become increasingly fierce.

XLSmart still has to work hard to catch up with Telkomsel, especially in terms of revenue, profit, tower infrastructure, and the number of customers.

4. The Fate of XL and Smartfren Customers: Should They Change Their Number?

Dian Siswarini emphasized that the merger process between XL and Smartfren will proceed smoothly without compromising the quality of service received by customers.

With full confidence, she added that customers need not worry, as they will not be forced to switch to new products or numbers. Customer peace of mind remains the top priority!

5. Analysis of EXCL, FREN, TLKM, and ISAT Stocks

After the market-shaking merger, investors are expected to be more vigilant in monitoring the movements of EXCL, FREN, TLKM, and ISAT stocks.

Sucor Sekuritas gives a positive signal for ISAT and EXCL as long-term choices due to promising growth potential.

For those aiming for dividend yields, TLKM shines brighter. Kiwoom Sekuritas also recommends buying TLKM and EXCL, while ISAT is advised to be held onto.

6. What is the impact of the XL and Smartfren merger on customers?

The presence of the merger between XL and Smartfren is expected to bring a breath of fresh air for customers, with a promise of impressive service quality improvements. Just imagine, soaring internet speeds, an ever-expanding network coverage, and a variety of internet package options ready to pamper consumers' digital needs.

7. Do XL and Smartfren customers need to change their numbers?

XL and Smartfren loyal customers need not worry about changing numbers after the merger! The three brands—XL, Smartfren, and SmartTel—will continue to operate under their respective identities, allowing you to enjoy services without the hassle of changing your number.

8. What are the stock prospects for EXCL, FREN, TLKM, and ISAT after the merger?

After the market-shaking merger, investors are expected to be more vigilant in monitoring the movements of the involved stocks.

Sucor Sekuritas revealed an attractive recommendation for ISAT and EXCL stocks as long-term options, while Kiwoom Sekuritas encouraged investors to buy TLKM and EXCL, marking interesting opportunities amid the ever-changing market dynamics.

(kpl/rmt)