PT Telekomunikasi Indonesia (Telkom) reportedly said that Singapore Telecommunications (SingTel) is willing to sell its 35% stake in mobile unit Telkomsel.
Telkomsel is 65%-owned by Telkom, which in turn is majority-held by the Indonesian government,…
PT Telekomunikasi Indonesia (Telkom) reportedly said that Singapore Telecommunications (SingTel) is willing to sell its 35% stake in mobile unit Telkomsel.
Telkomsel is 65%-owned by Telkom, which in turn is majority-held by the Indonesian government, and 35%-controlled by SingTel, the Singapore-based mobile giant.
Sudiro Asno, Telkom’s chief financial officer, was quoted saying during a press conference that there were currently informal talks between the government, Telkom and SingTel, but that a sale would depend on the stake value.
An adviser might be appointed later this month.
In July, the Indonesian government had reportedly approved a plan by incumbent Telkom to buy back the shares of Telkomsel from SingTel, as the Indonesian company is facing growing competition in the mobile market.
State-Owned Enterprises Minister Mustafa Abubakar was quoted saying, at the time, that the government would also approve a share swap between SingTel’s shares in Telkomsel and Telkom’s own shares.
It was also rumoured that the government had allocated Rp5 trillion (US$585m) to buy back Telkom shares from the public in order to allow the company to perform the share swap.
Abubakar added that such a deal would allow Telkom to further expand Telkomsel’s operations.
Until a few months ago, SingTel did not seem willing to sell its stake in Telkomsel. In an email to TelecomFinance at the end of June, a SingTel spokesperson said: “SingTel has a good partnership with both Telkom and Telkomsel and we continue to be a long term strategic investor in Indonesia.”
SingTel was not immediately available for comment before the press deadline.
Separately, Asno was quoted saying during the press conference that Telkom had cancelled plans to buy a stake in Cambodian mobile operator CamGSM because of valuation issues.
In late April, CEO Rinaldi Firmansyah had told local newspapers that Telkom had earmarked Rp1trn (US$114m) for acquisitions this year. One of its targets reportedly included the Cambodian company, which was being eyed by three other firms.
This deal would have represented Telkom’s first major purchase deal outside of Indonesia.
This is the second time that Telkom cancels a deal over a time span of about one year. Early 2011, the company was reported to considering a US$1bn CDMA deal with local operator Bakrie Telecom.
But the country’s competition commission expressed concerns, saying the deal could lead to a monopoly in the Indonesian CDMA market. A deal between the two companies would have seen Bakrie own some 70% to 100% of the CDMA market.
During the 19 May shareholders meeting, Firmansyah was quoted saying that Telkom had finally stopped negotiations with Bakrie. According to reports, the potential deal met opposition from the government but also from inside Telkom.
Telkom was not immediately available for comment.
