Telkom in talks to acquire Cambodian GSM operator

The Jakarta Post,
Jakarta
Sat, 12/18/2010

The nation’s biggest telecommunication firm, state-owned Telekomunikasi Indonesia (Telkom), is set to acquire a Cambodian company as part of Telkom’s ambitious agenda to become one of the top telecommunications players in Southeast Asia,
Telkom’s president director Rinaldi Firmansyah said Friday the firm had filed an acquisition proposal with a Cambodian firm. He refused to name the company, but said the acquisition would be the company’s initial step to expand its business in the region.
“We tried Iran but did not succeed. Now we are continuing our expansion to other countries. Cambodia is one of them,” he said after a shareholders meeting in Jakarta.
Rinaldi cited the low penetration rate of the telecommunications industry in Cambodia as the main reason for acquiring the company. Less than 50 percent of Cambodia’s 14 million population are cell phone subscribers, he said.
Telkom is among four companies vying to acquire a stake in the Cambodian GSM company, Rinaldi said. “If we are to acquire the company, we want to be the majority shareholder in it,” he said, without disclosing the amount of the planned investment.
According to Rinaldi, all four firms are conducting due diligence on the Cambodian firm. “We want the deal to be completed in 2011.”
As part of their expansion program, Telkom acquired a 17 percent stake in Malaysian firm SCICOM and opened an office in Singapore, and there will be another office in Hong Kong soon, he said.
Telkom is also in merger talks with the nation’s CDMA leader Bakrie Telecom, which has the Esia brand.
The mechanism of the planned merger, unveiled in the middle of the year, is still undecided, with Rinaldi saying the deal will not be completed this year.
“We will discuss the planned merger with Bakrie Telecom with our new board of commissioners,” he said.
Rinaldi was re-appointed president director of Telkom at the shareholders meeting, while the other members of the board of directors remained the same.
Meanwhile, several new faces were seen on the list of new commissioners on the board, with former transportation minister Jusman Syafii Djamal chairing the board, replacing former State Minister for State Enterprises Tanri Abeng.
State Minister for State Enterprises secretary Mahmuddin Yasin remained commissioner, while Rudiantara and Johnny Swandi Sjam were appointed independent commissioners for the firm.
The merger of Bakrie Telecom and Telkom’s CDMA division Flexi will be one of the main focuses for the new board of commissioners and directors, Rinaldi said, adding that the merger is necessary as there are too many telecommunications players in the country currently.
According to statistics from 2009, Esia had almost 11 million customers while Telkom Flexi had about 15 million.
A merger would create a dominant combination in the CDMA market, which the Business Competition Supervisory Commission (KPPU) watchdog group fears would create a monopoly. (est)