Indonesian telecom tower company PT Dayamitra Telekomunikasi Tbk, popularly called Mitratel, has completed the acquisition of PT Ultra Mandiri Telekomunikasi’s (UMT) fibre assets worth almost 650 billion rupiah ($41 million), according to an announcement on Thursday.
UMT is a unit of Indonesian state-owned construction firm PT Pembangunan Perumahan (PTPP).
Theodorus Ardi Hartoko, president director of Mitratel, said that the acquisition is crucial in increasing Mitratel’s fibre-to-the-tower market share and also strengthening its ecosystem. “UMT’s fibre assets are spread out in Sumatera, Java, and Bali, which aligns with our expansion strategy,” he told the media.
With the additional 8,101 km of fibre assets from UMT, Mitratel will have over 47,800 km of fibre assets. As of Sep 2024, Mitratel has 39,714 km of fibre assets with 56% located in Java Island.
DealStreetAsia had reported earlier that Mitratel was also interested in the fibre assets of Indonesian telecom player PT Indosat Ooredoo Hutchison (Indosat). Mitratel was still studying the assets, which also included submarine cables.
Since the deal involves multiple assets, Telkom-backed Mitratel is believed to be exploring various approaches including setting up a consortium to look at the deal. The consortium could include other Telkom subsidiaries such as Telin, engaged in international telecom networks, and Infraco, which is into fibre optic assets, Mitratel chief investment officer Hendra Purnama had told DealStreetAsia.
Fibre network accounts for 4% of Mitratel’s overall revenue. With over 39,000 km of fibre, Mitratel leads the market with a 29% share in the industry. Mitratel plans to add 14,000 km more this year.
Meanwhile, towers are the mainstay of Mitratel and account for 83% of its revenue. It has over 39,000 tower assets.
In addition to towers and fibre assets, Mitratel has nine other businesses, including the Flying Tower System, antenna sharing, Internet of Things, Smart Cell, and others. The Flying Tower System (FTS) uses solar-powered unmanned aircraft technology and High Altitude Platform Station (HAPS) technology from the Airbus subsidiary, AALTO HAPS. Purnama expects the R&D of FTS to be completed by 2025, with commercialisation by 2026.
In the Jan-Sep 2024 period this year (9M 2024), Mitratel booked a net profit of 1.53 trillion rupiah, up 7.13% year-on-year. Its revenue grew 8.67% year-on-year to 6.81 trillion rupiah in the period.
Mitratel, one of the biggest players in the telecom tower industry, competes with Djarum-backed PT Sarana Menara Nusantara Tbk and Saratoga-backed PT Tower Bersama Infrastructure Tbk.
Hartoko of Mitratel had said that consolidation, including a possible merger between XL Axiata and Smartfren, could lead to optimisation in the telecom industry. Sources told DealStreetAsia that the merger is likely to be completed before the end of this year.
Malaysian conglomerate Axiata Group and Indonesian peer Sinar Mas Group have begun talks for a merger of their Indonesian telecom units, XL Axiata and Smartfren, Nikkei reported.
Meanwhile, several telecom operators in Southeast Asia are trying to become asset-light as they focus on their core business.
The Philippines’ largest telecommunications group PLDT was in talks to sell up to 49% of its data centre business to Japan’s NTT, PLDT’s Chairman Manuel Pangilinan told Reuters in May. In September 2023, global investment firm KKR bought 20% of Singapore Telecommunications’ regional data centre business for S$1.1 billion ($813.49 million).
