Etisalat to acquire 16% of Excelcom; KPPU launches new probe

12 Dec 2007

Emirates Telecommunications Corp (Etisalat) has purchased a 15.97% stake in Indonesia’s third largest mobile operator by subscribers, Excelcomindo (Excelcom), for USD438 million, valuing the company at roughly USD2.74 billion. Etisalat will buy 1.13 billion shares in Excelcom from the Rajawali Group in a deal that could close before the end of this month, the UAE-based operator said in a statement. Etisalat is the second largest publicly traded Arab telecom firm in the world, with operations in 16 countries. It is entering Indonesia, the world’s fourth most populous country, to gain exposure to the country’s fast-growing telecoms market. Excelcomindo is currently owned by Telekom Malaysia (67%) whose third-quarter profit jumped 37.5% largely driven by growth in its home market and Indonesia. By the end of September Excelcom had 12.81 million subscribers, a market share of 13%.

In a separate story, Indonesia’s anti-trust agency, KPPU, has announced it is launching a probe into alleged price fixing of tariffs for short message services (SMS). Mohammad Iqbal, chairman of KPPU, told Reuters that the probe into pricing of text messaging covered all operators. ‘We have launched a preliminary investigation which could take 30 days. It has been going on for a week or so,’ Iqbal said. The latest anti-trust investigation follows a ruling last month over alleged price fixing in mobile phone calls by the country’s two biggest mobile phone operators Telkomsel and Satelindo.

Indonesia, Etisalat UAE, XL Axiata