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.