Singtel joint venture to sell 4,000 telco towers in Indonesia for $580 million

Shares of Singtel ended Thursday at $2.37, up two cents or 0.9 per cent.
Shares of Singtel ended Thursday at $2.37, up two cents or 0.9 per cent.PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - Singtel said its joint-venture company, Telekomunikasi Selular (Telkomsel) has entered into a sale-and-purchase agreement for the sale of 4,000 telecommunication towers to Dayamitra Telekomunikasi (Mitratel) for 6.2 trillion rupiah (S$580 million).

Mitratel is a subsidiary of Telkom Indonesia, which provides telecommunications infrastructure and has managed more than 24,000 telecommunication towers across Indonesia.

As part of the transaction, Telkomsel, in which Singtel has a 35 per cent interest, has also entered into a 10-year lease arrangement with Mitratel for rental of tower space, which will take effect from the transfer of the towers to Mitratel.

The transaction will enable Telkomsel to optimise its capital structure as it focuses on its core business of providing digital connectivity services to customers in Indonesia, said Singtel in a bourse filing on Thursday (Sept 2).

Said Telkomsel chief executive Hendri Mulya Syam in a statement: "Telkomsel continues to show its consistency in transforming its company portfolio in digital business through a number of measurable and targeted strategic steps. The continuation of the corporate action by both companies by transferring ownership of telecommunication towers to Mitratel further shows Telkomsel's seriousness about focusing more on strengthening the existence and the penetration of innovation in deploying digital services."

Mitratel's CEO Theodorus Ardi Hartoko said that the move will strengthen Mitratel's position as a business consolidator in the telecommunication tower business in the market.

"The transaction also confirms Mitratel as the leading tower provider in Indonesia and will open more opportunities for potential tenants to utilise Mitratel services, especially in the era of 5G in Indonesia, which has big opportunities for the telecommunication tower business."

Shares of Singtel ended Thursday at $2.37, up two cents, or 0.9 per cent.