Indonesia to Set Up Telco's Industry Consolidation
Moody's Investors Service has affirmed the  Baa3 issuer rating of PT lndosat Ooredoo Tbk (IDX: ISAT) and has changed the outlook to stable from negative but affirmed PT XL Axiata Tbk (IDX: EXCL)' Baa3 issuer rating with outlook remains stable - Photo: Special

JAKARTA (TheInsiderStories) – Indonesian government is planning to consolidate telecommunication companies to only three players left, said one executive yesterday (02/20). Currently, there are still five telecommunications industry players in the country.

President Director of PT Smarrfren Telecom Tbk (IDX: FREN) Merza Fachys, said President Joko Widodo saw a lot of pressure that is experienced by telecommunications companies because of technological changes. One such consolidation discourse is between PT Indosat Tbk (IDX: ISAT), PT XL Axiata Tbk (IDX: EXCL) and FREN.

“The entry of 4G makes the company have to prepare a large investment caused the voice and SMS services dropped significantly,” he noted.

Therefore, the consolidation is the solution to solve this problem and industry players often discuss this matter. He stated: “The discussion of consolidation is getting faster, this is indeed the way to achieve efficiency in the telecommunications industry.”

Moreover, Fachys said, the government indeed expects that there will only be three industry players to make this industry healthy. President Director of EXCL Dian Siswarini commeting the discussions of consolidation kept continuing between operators, but is is still the authority of shareholders.

Minister of Communication and Information Rudiantara has said that there were too many telecommunications players in Indonesia. Therefore, he hoped there would be consolidation through acquisition or merger among players so only two to three players remained.

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