Qtel’s Indosat takeover to be derailed by 49% limit, sources say

22 Jul 2008

Plans by Qatar Telecom (Qtel) to secure majority ownership of Indonesia’s second largest telecoms group Indosat are reportedly under threat, after officials said that the move would be blocked by a regulation limiting foreign ownership to 49%, Reuters reports. ‘The limit is in accordance with the telecommunication sector regulation that limits foreign ownership at 49%,’ said Fuad Rahmany, chairman of the capital market regulator, Bapepam. Last month Qtel paid USD1.8 billion for 40.8% of Indosat and then announced it was prepared to pay up to USD2 billion to acquire a further 44.9% of the company, if given the go ahead from Indonesia’s market regulator. Under Indonesian law, foreign firms are limited to 65% ownership of a mobile operator and 49% of a fixed line telco. Gatot Dewa Broto, a spokesman at Indonesia’s communications ministry, said that the authorities consider Indosat to fall into the second category and that although Qtel had requested an exemption, the authorities had declined for fear of setting a precedent.

In a separate development, Indosat has apparently reached its full year subscriber target of 33.5 million users, five months ahead of schedule. Local newspaper the Investor Daily quotes Indosat director Guntur Siboro as saying his firm has signed up close to 33 million cellular users and 800,000 fixed-wireless CDMA customers. The telco had set a target of signing up eight million new subscribers this year to reach 32.5 million by December.

Indonesia, Indosat Ooredoo (incl. IM2), Ooredoo Qatar