PTT Netherlands and Setdco Group acquire Telkomsel
JAKARTA (JP): PTT Telecom of the Netherlands and the Setdco Group, controlled by businessman Setiawan Djody, have acquired 22.5 percent of the shares in PT Telkomsel, a digital cellular telecom firm, for US$500 million.
Telkomsel's president, Koesmarihati Soegondo, said that she had just signed two separate accords, or letters of undertaking, with top executives of PTT Telecom Netherlands and PT Setdco Megacell Asia, a subsidiary of the Setdco Group.
"Under an agreement signed with PTT Telecom, the Dutch company will pay $304 million in cash and $29 million by other means for the acquisition of a 17.28 percent stake in the company. Under the other accord, Setdco Megacell will pay $88 million in cash and $8.4 million by other means for a 5.22 percent ownership," she said.
The non-cash payments, whose values may increase, will include personnel and expertise training and software contributions. Cash payments will be completed after the completion of legal details and investment status changes.
The accords were signed by Koesmarihati, PTT Telecom Asia's president, J.B. Volbeda, and Setdco Megacell's president, Setiawan Djody.
Koesmarihati said that the remaining shares of Telkomsel will be owned by PT Telkom and PT Indosat and that the portions of their ownerships will be discussed later.
Telkomsel, incorporated in 1995 as the country's second operator of global systems of mobile telecommunications (GSM), was previously 49 percent (worth Rp 63.9 billion) owned by PT Telkom and 51 percent (worth Rp 66.6 billion) by PT Indosat -- both of which are state-owned telecommunications providers already listed on domestic and international stock exchanges.
The battle for the acquisition of Telkomsel shares started in August 1995 when the company invited 15 foreign telecom operators to compete to become shareholders.
Koesmarihati said that out of the 15 invited parties, only eight submitted proposals.
"We then short-listed just three candidates. Meanwhile, four domestic firms also submitted their proposals," she said, adding that her company accepted advice from Goldman Sachs of the United States in the bidding process.
In addition to PTT Telecom in the final battle, the two other companies were Australia's Telstra Corp. Ltd. and Britain's Cable and Wireless Plc.
"We are looking for a foreign suitor offering the best expertise, experience and money. It should also be committed to transferring know-how," Koesmarihati said.
"For the domestic partner, we were looking for a company which has not yet been involved in telecoms projects in Indonesia but is able to extend added value in service. Setdco is committed to supporting the site location for our GSM expansion." he said.
The country's three operators of GSM now have foreign partners. DeTeMobil of Germany bought a 25 percent stake worth $586 million at PT Satelindo, while PT Excelcomindo is partly owned by the American Nynex and Mitsui of Japan.
Telkomsel, when it began its business on Aug. 4, 1995, operated in two provinces, Riau and North Sumatra, with two main station controllers (MSC) to serve some 4,000 subscribers.
"Now we operate in 12 out of the country's 27 provinces, with seven MSCs to serve 33,000 subscribers," Telkomsel's operations director, Garuda Sugardo, said yesterday.
Since last August, Telkomsel has invested Rp 279 billion, bringing the company's total investment to Rp 350 billion.
According to Koesmarihati, Telkomsel plans to launch its service in the key Jakarta market in March, which is currently controlled by the country's first GSM operator PT Satelindo.
Meanwhile, Garuda said that his company would install 60 base transceiver stations in the city to provide a high quality service. (icn)