Henan Putihrai makes TOWR’s stock a champion in the tower sector

Reporter: Aerospace Wisdom | Editor: Tendi Mahadi

KONTAN.CO.ID – JAKARTA. Issuers in the tower sector managed to record a solid performance throughout the first semester of 2021. Entering the second semester of 2021, the performance of tower issuers is projected to still record a slick performance.

Henan Putihrai Sekuritas analyst Steven Gunawan sees the prospect of tower issuers’ performance in the second half of this year will still be in line with market expectations. Moreover, the revenue of tower issuers is obtained through long-term contracts from issuers telco operator thus making the cash flow of income stable and sustainable.

“Positive catalyst will also come with potential for improvement tenancy ratio in line with the growth opportunities of the mobile data business following the trend of business digitization. Even though the activity has started offline Again, the demand for data usage will still be high, especially now that the digital ecosystem continues to be driven, such as: e-commerce, super apps, to digital banks,” explained Steven when contacted by Kontan.co.id, Friday (10/9).

Furthermore, Steven also sees that with the internet penetration rate in Indonesia which is still relatively low, the space for data traffic business growth is still wide open. As a result, tower issuers will also benefit. In addition, the liveliness of the presence of 5G connections will also be a positive sentiment for the performance of tower issuers in the long term.

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However, on the one hand, Steven sees a risk from the increasingly fierce business competition among tower issuers. Moreover, with all law, foreign investors will be able to fund tower issuers in Indonesia.

Indirectly, intense business competition can make it difficult to renegotiate rental rates if there is a contract agreement that is due

According to him, in the midst of increasingly fierce business competition, in order to be more efficient or achieve economies of scale, then tower issuers are aggressively taking acquisitions. Meanwhile, throughout the year, tower issuers are actively making acquisitions.

The latest is PT Sarana Menara Nusantara Tbk (TOWR) which through its subsidiary, Protelindo is preparing to annex 90% of the shares of PT Solusi Tunas Pratama Tbk (SUPR). Through this acquisition, TOWR has the potential to add another 6,410 towers belonging to SUPR.

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Previously, PT Tower Bersama Infrastructure Tbk (TBIG) in April also completed the acquisition of 3,000 towers from PT Inti Bangun Sejahtera Tbk (IBST). Then, there is also PT Dayamitra Telekomunikasi alias Mitratel which received 4,000 new tower units after Telkomsel transferred ownership to Mitratel.

“If the execution is smooth, then after the completion of the acquisitions, only the three largest issuers of the largest towers remain, namely TOWR with 28,000 towers, Mitratel with 27,000 towers, and TBIG with 19,800 towers. The three issuers will be in a tight competition, moreover Mitratel is also planning to conduct an IPO this year,” added Steven.