STC subsidiary secures US$1.2 billion in financing

Axis, the Indonesian cellco 80 per cent owned by STC, yesterday announced the signing of US$1.2 billion financing deal with a tenure of seven and a half years, with local and international financial institutions. The deal comprises three facilities: a US$450 million Murabaha commercial facility arranged by Deutsche Bank and HSBC; a US$400 million facility for equipment purchases from Huawei; and a US$350 million facility for equipment purchases from Ericsson.

The financing is set to help Axis’ expansion and growth strategies for the next five years, where according toe CEO Erik Aas, the cellco intends to double its market share from five per cent to 10 per cent. Axis launched commercially in March 2008 and currently counts around 11 million subscribers in a market of 200 million mobile users. There are five GSM operators in total in Indonesia.

“Over the coming five years I expect to see Axis enjoying close to 10 per cent market share, with US$1 billion in annual revenues,” Aas said. “We forecast a major contributor of the revenue will be from mobile broadband given the large percentage of youth in the market, many of who have only accessed the Internet on mobile devices, and never a PC.”