KemKominfo green-lights Indosat-Tri merger with conditions

10 Nov 2021

Indonesia’s Ministry of Communication and Information (MCI, also known as KemKominfo) has formally approved the proposed merger of domestic telcos Hutchison 3 Indonesia (Tri) and Indosat Ooredoo, IndoTelko reports. Following an evaluation process, the regulator has recommended that the Minister of Communications and Informatics approve the application provided both parties involved continue to ‘pay attention to the principles of consumer protection, maintain a healthy business competition climate and not engage in discriminatory business practices’. The merged entity, Indosat Ooredoo Hutchison (IOH), will become the archipelago’s second largest mobile network operator behind Telkomsel (Telekomunikasi Selular), with estimated annual revenue of approximately USD3 billion. Further, the combination is expected to result in annual savings of between USD300 million and USD400 million, realised over the next three to five years.

The regulator noted, however, that the green light comes with a number of terms and conditions, namely:

IOH is obligated to increase the number of new sites until 2025 with the minimum number as stated in its proposal

IOH is required to expand the coverage area of cellular services until 2025 with the number of new villages/kelurahan served at least as stated in its proposal

IOH must improve service quality up to 2025 with a minimum throughput limit in accordance with the submitted proposal

IOH is obliged to return a portion of the radio frequency band to the State in the amount of 5MHz FDD (2×5MHz = 10MHz) in the 2100MHz radio frequency band. IOH has been given a transition period of one year to continue to be able to use the frequency band of 5MHz FDD (2×5MHz = 10MHz) in the 2100MHz radio frequency band as of the date the Radio Frequency Band Licence resulting from the merger is stipulated

IOH is also required to adjust business licences as a result of corporate actions of merging or consolidating business entities in accordance with the provisions of laws and regulations.