The deal with Telkomsel’s parent company Telkom will see the mobile operator merged with Telkom’s wholly owned broadband arm, IndiHome
Today, Indonesian wireless operator Telkomsel has announced plans to merge with fixed broadband operator, IndiHome.
The deal, worth roughly $3.9 billion, will see Indonesia’s largest mobile operator combined with the country’s largest fixed broadband provider.
Both Telkomsel and IndiHome are owned by the same parent company, multinational telecoms conglomerate PT Telkom Indonesia; Telkom wholly owns IniHome and owns a 65% stake in Telkomsel, with Singapore’s Singtel holding the remaining 35%.
Following the merger, Telkom will hold 70.4% of the combined entity, with Singtel holding the remaining 29.6%.
“We believe this is a rare opportunity for Telkomsel to tap into the high-growth fixed broadband market in Indonesia by partnering with the country’s largest broadband operator which is profitable and cash-generating,” said Yuen Kuan Moon, CEO of Singtel. “Given the post-pandemic demand for high-quality broadband and the global shift to fixed mobile convergence, this move will help Telkomsel entrench its position as Indonesia’s leading integrated telco and greatly enhance its growth prospects.”
The scale of the fixed broadband opportunity itself also cannot be underestimated. Indonesia has a broadband penetration rate of just 14%, leaving over 200 million people without access. In additional, fixed broadband ARPU is six-times that of mobile customers, offering a huge opportunity for revenue growth.
Telkomsel hopes that by offering converged fixed–mobile services, their dominant position within the Indonesian market will be secured for years to come.
The deal will be subject to all the typical regulatory oversight and will require the approval of Telkom’s shareholders.
The Indonesian telecoms sector has been undergoing significant consolidation recently, most notably with the combination of CK Hutchison’s H3I and Ooredoo’s Indosat, which was finalised at the start of 2022.
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