Telkomsel strikes $3.9bn merger with broadband unit IndiHome

Telkomsel strikes $3.9bn merger with broadband unit IndiHome

Telkomsel signed an agreement with its parent company Telkom to merge with its broadband arm IndiHome to create a company worth IDR58.3 billion (US$3.9 billion), a move to capitalise on the rising demand for broadband in Indonesia.

“We believe this is a rare opportunity for Telkomsel to tap into the high-growth fixed broadband market in Indonesia by partnering with the country’s largest broadband operator which is profitable and cash-generating. Given the post-pandemic demand for high-quality broadband and the global shift to fixed mobile convergence, this move will help Telkomsel entrench its position as Indonesia’s leading integrated telco and greatly enhance its growth prospects," said Singtel group CEO Yuen Kuan Moon, the Singapore-based company holds 35% of shares in Telkomsel.

Telkomsel president director Hendri Mulya Syam added the merger advances plans to expand its business portfolio, particularly in fixed mobile convergence services.

IndiHome is the market leader with a share of 75.2% according to data from Analysys Mason. Indonesia has a broadband penetration rate of 14%, compared to 40% across Southeast Asia. Telkomsel. The Indonesian operator noted its fixed subscriber ARPU is around six times more than that of mobile, which presents space for significant growth through broadband.

From the merger, Telkom will increase its shares in Telkomsel, resulting in Telkom holding 70.4% and Singtel 29.6% upon legal completion of the spin-off. The merger requires approval from Telkom’s independent shareholders.

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