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Telco merger kicks off three-horse race, consumers wary
The mobile market in Indonesia has been trimmed to just three major players as the XLSmart merger is completed, prompting consumers to question how fewer players in the market might affect prices and service quality.
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Evolving dynamics: XL Axiata, Smartfren Telecom and its unit Smart Telecom (SmartTel) officially sealed a US$6.5 billion merger deal on April 16. (Courtesy of/XLSmart)
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ndonesia’s telecom market has narrowed to just three major operators after XL Axiata, Smartfren Telecom and its unit Smart Telecom (SmartTel) officially sealed a US$6.5 billion merger, leaving consumers wondering whether fewer players in the market could affect prices and service quality.
The deal, which took effect on April 16, created XLSmart, a new entity that now serves 94.5 million subscribers.
Consumer group Indonesian Consumers Foundation (YLKI) urged regulators to stay alert for any signs of price hikes or declining network standards.
“We appreciate the business move; hopefully it won’t come at the expense of consumer welfare,” YLKI spokesperson Rio Priambodo told The Jakarta Post on Tuesday.
He said persistent complaints about frequent outages, unstable signals and unreliable services continued to top the list of cellular consumer grievances.
“Whatever the business strategy, it must address these longstanding quality issues,” he added.
The merger folds all three companies into PT XLSmart Telecom Sejahtera (XLSmart), with XL Axiata as the surviving entity. Full integration is expected within two years.
