Targeting Telko Indonesia's Industry 2018
By Indra Khairuddin
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12 January 2018 05:00
Jakarta, Selular.ID - In 2017 Indonesia's cellular industry experienced a pretty "exciting" dynamics. Tariff war is still coloring this industry even though most operators are still trying to persevere in the middle of the revenu which continues eroded due to industry changes.
Not to mention the regulatory issues related to the revision of Government Regulation No.52 and 53 which makes the operator divided into several camps, plus the interconnection tariff polemic which until now has not been completed also coloring the comopetition that occurred in the Indonesian telecommunications industry.
Beginning in 2018 rumors mergers and acquisitions of telko company was back blowing hard. Indeed, the consolidation of these operators is a priority for the MoCI in order to nourish the industry.
With the number of operators who are surplus, the cellular industry in Indonesia has been slowing down. Since 2010, the average industry growth per year is only 9%. Whereas the previous period is able to print growth up to 20% per year.
Menkominfo Rudiantara admitted, the number of operators that make too much cellular industry, as if no longer prospective.According to Rudiantara, to re-healthy the operator should immediately accelerate the consolidation step. The fewer players in the industry, it will be much healthier. Currently, there are 11 service providers that have permission. He hopes, the number of operators will shrink drastically.
"I hope there are operators who want to consolidate and the remaining three or four service providers," explained the man who is familiarly called Chief RA is speaking in a national seminar themed "Looking for Ideal Data Tariff" held by the ITF (Indonesia Technology Forum) Jakarta, (26/7/2017).
Previously had spread the word Sinarmas Group would buy Indosat Ooredoo and intensive talks have been done by both parties. But until now the news has not seen the clarity.
Earlier this year, based on searches by Cellular and rumors developing in the Capital Market, there was the potential for three-way merger and acquisition to occur in 2018 between Indosat (ISAT), Hutchinson Tri Indonesia and Smartfren.
In the merger plan the three companies are rumored to be willing to release Ooredoo all its ownership although it may feel heavy because Indosat is a significant revenue contributor to Ooredoo.But with international asset-to-asset swaps it seems to be a sweetener deal.
The price offered to Ooredoo was reportedly quite profitable from the purchase price of Qatar Telecom (now Ooredoo) in 2008. The price is estimated in the range 7500 - 8300 per share
The merger process of these three operators is also rumored to involve the Indonesian entity as the main controller (with access to funding from abroad). This seems to be in line with Joko Widodo's campaign promise during the presidential election. At that time Jokowi promised "ISAT Buyback". Of course "Buyback" through an Indonesian country or entity may be considered a "buyback / asset comeback" for the country.
If the merger of these three operators is implemented, then there will only be three operators in Indonesia as desired by the MoCI.Then how the competition map will happen.
For Telkom Group, Merger three operators may be better than if the merger happened between Indosat and XL considering H3I has limited frequency owned. Unlike the case when the merger that occurred between Indosat and XL, in addition to dominant market dominance, combined these two operators also controls a very large spectrum.
The issue of frequency ownership is also likely to be of concern in the merger of these three operators. The reason, if the ownership of operator frequency of the merger results control 50 percent of the total frequency that there will affect the indications of monopoly and unhealthy business competition.
Indeed, in Law No. 5 of 1999 concerning Prohibition of Monopolistic Practices and Unfair Business Competition does not specify the ownership of frequencies but the merger jurisprudence of XL and Axis can be a reference in which XL should return the frequency of Axis's property to the State.
Jakarta, Selular.ID - In 2017 Indonesia's cellular industry experienced a pretty "exciting" dynamics. Tariff war is still coloring this industry even though most operators are still trying to persevere in the middle of the revenu which continues eroded due to industry changes.
