Telekomunikasi Indonesia is in negotiations to buy a majority stake in MobiTel having out bid rival investors, an official at the Jakarta-based telecom reportedly said yesterday, less than a week after the French Embassy announced that telecommunications giant France Telecom was in talks to buy a stake in Cambodia’s market leader.
The possible deal with Telekomunikasi would value CamGSM, the company that owns MobiTel, at about $1 billion, according to an unnamed source familiar with the deal and cited by the news service Reuters.
“I hope that the process of acquisition will be completed by the first quarter next year,” said Tanri Abeng, Telkom’s chief commissioner, according to Reuters.
“We’ve made it through the bidding process and we’re now in talks to get financial details done, but we are surely going to take a majority stake,” Mr Abeng said, declining to provide details.
Kith Meng, president of Royal Group, which owns CamGSM, declined to comment.
“I cannot reveal any of these things because I am not aware of these things,” he said. “I cannot make any statement at this moment.”
Dominique Mas, first secretary at the French Embassy, said that France Telecom did have at least one competing bidder in its effort to acquire a stake in MobiTel, but he did not know the results of the negotiations.
“They were in the final process, but now it’s up to MobiTel to choose a partner,” he said. A France Telecom spokesman did not reply to questions about the negotiations.
More than 52 percent of Telekomunikasi, the largest telecom company in Indonesia, is owned by the Indonesian government, with the remaining shares publicly traded. France Telecom is one of the largest telecommunications companies in the world.
Alan Sinfield, CEO of the qb Network, said the interest by two larger telecoms in Mobitel is not surprising.
“All the mature operators are stagnating in their own markets, so they are looking for investments in a growth market and this is a growth market,” he said.
A company that buys MobiTel would inherit what is considered to be the market leader, having been established in 1996 with its former partner, Luxembourg’s Millicom International Cellular. But it is also one with substantial debt.
Last month the Bank of China approved a $591 million loan to refinance debt accrued through Royal Group’s $346 million buyout last year of Millicom and a $100 million loan from the International Finance Corporation in 2008.
It would also enter a market that currently has nine players.
Two companies, Star-Cell and SmartMobile, announced last week that they would merge, while qb has said it is interested in acquiring another company’s infrastructure and subscribers.