Telkom plans buyback of SingTel’s Telkomsel shares

20 May 2011

Indonesia’s biggest telco by revenue, Telekomunikasi Indonesia (Telkom), has revealed plans to buy back possibly all of the 35% stake held by Singapore’s SingTel in its mobile arm Telkomsel in an effort to improve the group’s profitability. Reuters quotes the Indonesian firm’s CEO Rinaldi Firmansyah as saying that the plan – put forward by the government – was approved by shareholders at yesterday’s AGM, as the operator struggles to increase profits in an increasingly saturated and competitive domestic mobile market. ‘We will talk with SingTel to work out the financial details but I think we can do it,’ said Firmansyah. However, SingTel seems less inclined to divest its mobile asset. A spokeswoman for the company said: ‘SingTel has a good partnership with both Telkom and Telkomsel and we continue to be a long-term, strategic investor in Indonesia.’

Separately, it has been reported that Telkom had ended its talks with fellow operator Bakrie Telekom over the proposed combination of their CDMA businesses. The long-awaited merger having failed to reach fruition.

Indonesia, Singtel Group, Telkom Indonesia, Telkomsel (Telekomunikasi Selular)