Purchasing 6,050 Telkomsel towers will increase Mitratel’s bargaining power at the IPO

ILLUSTRATION. PT Telkom Indonesia (Persero) Tbk (Telkom) is structuring its portfolio through its two subsidiaries Mitratel and Telkom

Reporter: Nur Qolbi | Editor: Herlina Kartika Dewi

KONTAN.CO.ID – JAKARTA. Telecommunication infrastructure provider PT Dayamitra Telekomunikasi (Mitratel) will buy 6,050 units of PT Telekomunikasi Seluler (Telkomsel) tower worth Rp 10.3 trillion. Takeover transaction between subsidiaries of PT Telekomunikasi Indonesia Tbk (TLKM) or Telkom is carried out in stages and is targeted to be completed by the end of the first quarter of 2021.

Telkom Strategic Portfolio Director Budi Setyawan Wijaya said this corporate action was part of the TelkomGroup portfolio arrangement in order to optimize the business and assets owned, and increase shareholder value.

“This step is also an effort value creation tower business and ensure that each subsidiary can focus on strengthening their respective business lines, “Budi said in a written statement, Friday (16/10).

Meanwhile, President Director of Mitratel Theodorus Ardi Hartoko said that this corporate action is one of the business strategies to improve Mitratel’s telecommunication infrastructure capabilities.

Also Read: Mitratel will buy 6,050 Telkomsel towers worth Rp 10.3 trillion

“We believe the transfer of ownership of 6,050 telecommunication towers belonging to Telkomsel will fundamentally strengthen Mitratel’s business and create added value for Mitratel,” he said.

Theodorus also believes that the telecommunications tower business is still promising. Given that telecommunications operators are still expanding to improve network quality and expand their service coverage.

What’s more, 5G technology will enter and be implemented in Indonesia in a few years. That way, the telecommunications tower business is predicted to continue to post positive performance going forward.

After the transfer of ownership is complete, Mitratel will have more than 22,000 towers spread across various regions and serve all cellular operators in Indonesia.
“This transfer of ownership of Telkomsel’s telecommunications tower can make Mitratel as one of the largest tower providers in Indonesia,” said Theodorus.

Previously, Mitratel also planned to carry out an initial public offering or initial public offering (IPO).

Henan Putihrai Sekuritas analyst Muhammad As’ad said the purchase of 6,050 towers from Telkomsel would increase Mitratel’s bargaining power at the IPO.

“The reason is that additional tower ownership can increase Mitratel’s competitiveness with competitors. Currently, the issuer holding the most tower rentals is PT Sarana Menara Nusantara Tbk (TOWR), “kata As’ad.

Also Read: Measuring TLKM Stock Prospects: from Mitratel’s IPO to Omnibus Law Impact

As of June 2020, TOWR owns 21,271 towers or the equivalent of 22% of the total number of telecommunication towers in Indonesia.

The tower purchase will also have a positive impact on Telkom’s performance in line with Mitratel’s additional revenue. This is because the purchase of this tower allows an increase in collocation and the number of rentals that Mitratel has recorded.