Indonesia’s tower operators ‘make play’ for fibre market

9 Jan 2015

Two of Indonesia’s biggest mobile tower operators, PT Solusi Tunas Pratama (STP) and PT Tower Bersama Infrastructure, are rumoured to be looking to expand their operations into the country’s fibre-optic market, taking advantage of the anticipated surge in mobile internet data traffic as domestic cellcos roll out their 4G networks. The Jakarta Post writes that STP, which owns and operates more than 2,400km of optical fibre networks, expects that its fledgling non-tower operations (i.e. fibre-optic and small cells) will expand to account for around 50% of its total revenue within four years, up from 9%-10% currently.

In September last year, STP revealed it would pour IDR1.57 trillion (USD124 million) into its fibre-optic business by upping a loan facility to its subsidiary BIT Teknologi Nusantara to help the latter further boost its fibre operations. At the time, STP finance director Juliawati Gunawan said that in FY2014 alone, the firm aimed to increase its revenue and net profits by up to 30%, from IDR840.1 billion and IDR197.6 billion, respectively. Last year, the tower operator invested IDR1.7 trillion in CAPEX upgrade works, 70% of which was used for organic growth such as adding towers and expanding its fibre-optic business, while the remaining 30% was set aside to support its acquisition plans.

Meanwhile, Tower Bersama says it is deploying fibre in and around greater Jakarta, although it concedes that fibre currently only contributes a negligible amount to its overall turnover. In November 2014 publicly listed Tower Bersama was linked with a bid for a USD1 billion multi-tenor financing plan, only months after the company secured a USD300 million loan facility in July that year. The company was said to be in talks with its existing lenders for the financing, according to an unconfirmed report from Reuters.