ASEAN KEY DESTINATIONS
Home >> Daily News >> Indonesia News >> Companies >> Indonesia’s state telecom shifts focus, $1.2 bln tower deal with SingTel
Indonesia’s state telecom shifts focus, $1.2 bln tower deal with SingTel
Indonesia's state-controlled PT Telekomunikasi Indonesia said on Friday it expects a tower deal with Singapore Telecommunications worth up $1.2 billion to be completed this year, Reuters reported.
Telkom, which said it sees single-digit percentage growth in second-quarter net profit, is shifting its focus to data services to earn higher profits as subscriber growth in Southeast Asia's biggest economy slows. It also needs to invest heavily in telecoms infrastructure including towers.
Telkom's president director Rinaldi Firmansyah said the firm was still in talks with SingTel. Earlier this year, Telkom said it would borrow nearly $400 million to buy out SingTel's interests in about 9,000 telecoms towers.
"We'll still have to see how aggressive they will be about finding tenants for the towers once the deal is done. The deal itself still has be to negotiated in terms of pricing and how it's structured," said Sebastian Tobing, equity analyst in Jakarta for UBS, which rates Telkom as a buy.
The towers are owned by PT Telekomunikasi Selular , Indonesia's biggest mobile phone operator. Telkom owns 65 percent of Telkomsel and SingTel owns the remaining 35 percent.
Telkomsel is expected to add 10 million new subscribers this year, bringing the total to 91 million, Telkom's finance director Sudiro Asno said.
"The market is already mature but we expect to still retain 50 percent of market share," Asno told reporters.
Telkomsel will get a 3-4 trillion rupiah ($326.6-$435.5 million) loan from foreign and local banks, replacing plans to raise 3 trillion rupiah from bond issues this year.