Telkom welcomes SingTel's entry to wireless unit
Telkom welcomes SingTel's entry to wireless unit
Tantri Yuliandini, The Jakarta Post, Jakarta
State-owned telecommunications company PT Telkom said that the
entry of Singapore Telecommunications Ltd. (SingTel) as a
strategic partner in cellular company PT Telkomsel marked
another step forward for Telkom in the restructuring of its
wireless interests.
Telkom said in a statement on Thursday that the company would
now move forward with its plan to combine Telkom's cellular
services, called Telkom Mobile, with Telkomsel.
"With SingTel's technological and commercial expertise ... we
believe that through our partnership Telkomsel will be better
positioned to construct the most advanced wireless networks in
the country," Telkom's president Mohammad Nazif said.
SingTel signed a definitive agreement on Wednesday with KPN
Mobile BV to purchase KPN's 22.3 percent stake in Telkomsel for a
cash consideration of US$602 million.
SingTel said that the company would pay for the sale from
borrowings.
With the purchase, SingTel replaces KPN as Telkom's strategic
partner in Telkomsel and assumes the rights and responsibilities
under the shareholders' agreement previously held by KPN.
SingTel said in a statement that it would also be assuming the
liability for commitments made by KPN, under a technical
assistance agreement with Telkomsel, for an amount of $25
million.
Telkom also said that it was in discussions with SingTel over
a possible purchase of additional Telkom shares in Telkomsel.
Telkom currently owns 77.7 percent of Telkomsel.
Telkomsel currently has the largest number of cellular
subscribers in the country with more than 2.5 million customers
signed up.
The company has targeted a total of 3 million subscribers by
the end of the year.
"International investments are integral to SingTel's goal of
becoming the leading communications service provider in the Asia
Pacific region. Indonesia, with its vast market, is central to
our plans for the region," SingTel's president and CEO Lee Hsien
Yang said.
He said that although Indonesia had a weak economic
environment, its mobile market had displayed strong resilience,
growing by 82 percent a year over the last two and a half years.
"With just over 4.6 million mobile users in Indonesia, we
believe there is significant room for further growth," Lee said.