HK's First Pacific mulls RI expansion
HK's First Pacific mulls RI expansion
HONG KONG (Dow Jones): First Pacific Co. said Monday that it
is considering increasing its presence in the Indonesian mobile
telecommunications market.
The Hong Kong-based conglomerate already owns a 35 percent
stake in Indonesian cellular operator PT Metro Selular Nusantara,
or Metrosel, and company officials said they're engaged in
discussions that could turn Metrosel into a national player.
"Metrosel needs a nationwide platform to compete with other
national (telecommunications) operators," First Pacific managing
director Thomas Yasuda told a press conference.
Metrosel currently provides cellular telecommunications
services in Central and East Java.
Yasuda said that First Pacific's options include boosting its
investment in Metrosel to expand its network coverage, or
pursuing national cross-branding agreements with other Indonesian
mobile operators in other provinces.
Telecommunications accounted for a significant chunk of First
Pacific's net profit in the just-ended half year period, bringing
in US$16.7 million of the US$113.1 million total.
The company said it is optimistic about the performance of the
sector in the second half, especially once an alliance among
Nippon Telegraph & Telephone Corp., Philippine Long Distance
Telephone Co. and Smart Communications Inc. is completed. First
Pacific has a majority stake in the last two companies.
On the China front, China United Telecommunications Corp., or
China Unicom, has initiated talks with First Pacific over
termination of their ventures and subsequent compensation.
First Pacific has invested in Shenzhen Merchant Link, a GSM
mobile network, and Fujian Telecom, but Beijing last month banned
the so-called "China-China-Foreign" ventures, a convoluted
arrangement between Chinese entities and foreign companies
designed to circumvent mainland policy allowing only domestic
players to operate mobile networks.
We are confident that China Unicom will be fair in the
resolution of the matter," said Yasuda, adding that he cannot
predict when the resolution will be reached.
The Chinese authorities recently set the end of September as
the deadline for China Unicom to terminate its telecommunications
joint ventures with foreign companies, which include Hong Kong
conglomerates New World Development Co. and First Pacific.
"For Fujian and Shenzhen, the growth of business has been
quite remarkable and we'd like to have that continue," Yasuda
said.
Last month, shareholders of First Pacific Co. approved the
conglomerate's plans to take a 40 percent stake in PT Indofood
Sukses Makmur, the world's biggest instant noodles maker, for
US$621 million.
Yasuda said he expects the transaction to go through very
soon. He also said the focus for the instant noodles company in
the second half is to speed up the sale of its flour mill
operator, PT Bogasari Flour Mills, and to gain greater presence
in the region.
"Indofood will be seen as the best acquisition First Pacific
has ever made" when the political unrest in Indonesia settles,
said Yasuda.