PT Dayamitra Telekomunikasi (Mitratel), unit of state-owned telecommunication provider, PT Telkom Indonesia Tbk (IDX: TLKM) and tower operator, PT Profesional Telekomunikasi Indonesia (Protelindo) acquired 3,100 towers owned by cellular company, PT Indosat Tbk (IDX: ISAT), said the third parties in a written statement on Tuesday (10/15) - Photo by Indosat

JAKARTA (TheInsiderStories) – PT Dayamitra Telekomunikasi (Mitratel), unit of state-owned telecommunication provider, PT Telkom Indonesia Tbk (IDX: TLKM) and tower operator, PT Profesional Telekomunikasi Indonesia (Protelindo) acquired 3,100 towers owned by cellular company, PT Indosat Tbk (IDX: ISAT), said the third parties in a written statement on Tuesday (10/15). The sales value of the tower reached Rp6.39 trillion (US$453.19 million).

Based on the official statements, Mitratel has signed a sales purchase agreement with Indosat on Oct 14, as the winner of 2,100 towers with a value of Rp4.44 trillion. While unit Protelindo won the auction of 1,000 towers with a value of Rp1.95 trillion.

The completion of the transaction its expecting before the end of 2019, said the companies. After the transaction will have completed, Indosat, Mitratel and Protelindo will sign a master tower lease agreement. The new owners agreed to lease back the tower to Indosat.

Indosat to lease 178 plots of land owned by Protelindo, and 369 plots of land owns by Mitratel. The tenancy period is also valid for 10 years. This transaction is done through a master land lease agreement.

Protelindo Acquired 1,000 towers of Indosat – Photo by Indosat

Indosat has appointed JP Morgan as exclusive financial advisor. Then Redpeak Advisers acts as Protelindo‘ financial advisor, and Credit Suisse acts as Mitratel’ financial advisor.

Indosat President and CEO Ahmad Al Neama said, with this collaboration, the company placed a high-quality portfolio with two of Indonesia’ leading telecommunications tower providers and would lease it back on attractive terms.

On other hand, Mitratel Managing Director Herlan Wijanarko said the acquisition of 2,100 Indosat Ooredoo towers would strengthen business fundamentals and create added value for Mitratel significantly.

While Protelindo Managing Director & CEO Ferdinandus Aming Santoso statede, the addition of 1,000 towers and approximately 1,850 tenants will strengthen the company’ position as the largest telecommunications tower provider in Indonesia with nearly 20,000 towers and more than 32,000 tenants.

Furthermore, Telkom’ Wholesale & International Service Director Edwin Aristiawan added, the corporate action carried out by TelkomGroup was one of the business strategies to improve capabilities in the aspect of telecommunications infrastructure.

He said, the tower owned by Indosat has a tenancy ratio above the industry average with a sturdy structure and coverage throughout Indonesia. Aristiawan revealed that the telecommunications tower business is still promising.

“The telecommunications tower business in the future is predicted to be getting better, especially welcoming the arrival of 5G technology in Indonesia. The presence of 5G technology in Indonesia will increase market demand for tower providers,” he said.

Mitratel is a subsidiary of Telkom which is engaged in providing telecommunications infrastructure and has managed more than 13,700 telecommunication towers spread across various regions and serving all cellular operators in Indonesia. The acquisition supports TelkomGroup’ steps through its unit to become the dominant player in the tower industry in Indonesia.

by Linda Silaen, Email: linda.silaen@theinsiderstories.com