Shares in mobile phone operator PT XL Axiata Tbk, controlled by Malaysia-based Axiata Group Bhd, slid as much as 3.85 percent on Thursday, after Bisnis Indonesia said the parent company was considering buying PT Axis Telekom Indonesia.
PT Axis Telekom, the Indonesian unit of Saudi Telecom Co , is worth up to $1 billion, Bisnis Indonesia said.
Nomura Equity Research raised concerns about the deal, saying Axiata was more hurt by Hutch than Axis and the consolidation may not change the situation significantly.
"Hutch could even up-the-ante to gain more share if XL-Axis were to combine," Nomura said in a note on Thursday.
XL shares were down 2.88 percent at 5,050 rupiah, the broader Jakarta Composite Index's was down 1.4 percent.
1331 (0731 GMT) (Reporting by Andjarsari Paramaditha; Editing by Anand Basu)