Telkom Indonesia plans Telkomsel IPO in 2014

2 Dec 2013

Indonesia’s largest communications company PT Telkomunikasi Indonesia (Telkom Indonesia) has divulged plans to hold an initial public offering (IPO) or a so-called ‘backdoor listing’ for its mobile arm PT Telekomunikasi Selular (Telkomsel) next year, to raise cash to fund its ongoing expansion programme. Although it has yet to decide on which course to follow, the country’s largest telecom provider is planning to take Telkomsel public with Indra Utoyo, innovation and strategic portfolio director at Telkom, saying an IPO would likely be the preferred option. Indra confirmed that Singapore Telecom (SingTel), which owns a 35% stake in Telkomsel, has agreed to the plan. However, the official declined to provide any further details of the IPO proposals, other than it will take place after the completion of the sale of its tower business Dayamitra Telekomunikasi (known as Mitratel), so that it can focus on its main business. Telkom is currently working on a deal to swap its 49% stake in Mitratel with a ‘stake in a prospective telecommunications tower operator company’, he said. The firms likely to be involved in any deal are Profesional Telekomunikasi Indonesia (Protelindo) and Tower Bersama Infrastructure, a unit of Sarana Menara Nusantara. Mitratel operates 4,000 mobile towers with total assets amounting to IDR4.93 trillion (USD410 million).

The funds generated will be used to help Telkom/Telkomsel’s expansion drive. A total of IDR22.28 trillion has been set aside for capital expenditure spending in 2014, up 11.4% on this year’s IDR20 trillion figure. Telkom finance director Honesti Basyir says that 60% of next year’s CAPEX is set aside for Telkomsel, ‘the rest is used for the holding company and its other subsidiaries’, he noted. The group expects revenue to grow 8% this year to IDR83.31 trillion and by around 6%-8% in fiscal 2014. Telkomsel has deployed more than 54,000 base transceiver stations (BTS) covering 97% of the Indonesian population in 200 major urban centres.

Indonesia, Telkom Indonesia, Telkomsel (Telekomunikasi Selular)