Telekom to raise stake in Excel

Telekom to raise stake in Excel

Adeline Lee, Bloomberg/Kuala Lumpur

Telekom Malaysia Bhd., the nation's biggest telephone company, will spend US$606.1 million to raise its stake in Indonesia's PT Excelcomindo Pratama to 80 percent, seeking overseas growth to beat slowing sales at home.

The stake in Excelcomindo, Indonesia's third-largest mobile- phone company, will rise to 80 percent, Telekom Chairman Muhammad Radzi Mansor told reporters on Tuesday. The company bought 27.3 percent of Excelcomindo for $314 million in December.

"Excelcomindo has a high-quality network and robust transmission infrastructure," Muhammad said. "Telekom can build on the strength and nurture the company to become a credible mobile-phone operator in Indonesia."

Telekom is buying more shares in Excelcomindo ahead of a planned initial public offering this year in the Indonesian company that has about 16 percent of the nation's cellular market. About one in eight people in the nation of 235 million has phone access. In Malaysia, about one in two of the nation's 25 million people owns a mobile phone.

"Based on population, expansion into Indonesia is good," said Mushthaq Ibrahim, who manages $1.05 billion, including Telekom shares, as chief investment officer at Amanah SSCM Asset Management Bhd. "The question is why does it need 80 percent?"

Telekom shares rose 20 sen, or 2 percent, to 10.10 ringgit at the close of trading in Kuala Lumpur, the stocks second day of gain in three.