Telekomunikasi Indonesia, Indonesia’s biggest telecom firm plans to buy back the 35% percent stake in Singtel’s subsidiary Telkomsel.
Telkomsel is jointly owned by Telkom (51%) and Singtel (35%)
The main reason given is to boost Telkom’s EBITDA but the main reason could be due to the aftermath of the on-going lawsuits where ST Telemedia, another Singapore government linked corporation, sold its stake in Indosat after Indonesia ruled that Indosat and Telkomsel were fixing prices.
According to CIMB, a likely reason is Telkom’s intention to own 100% of Telkomsel because SingTel is reluctant to sell Telkomsel’s cell towers to Telkom. Telkom had intended to park all the towers of its units under Daya Mitra and eventually list this entity. Taking full control of Telkomsel could pave the way for this transaction. Telkomsel controls the largest number of towers in Indonesia, about 20k or 40% of industry total.
