JAKARTA, Indonesia-The recent acquisition of the Indonesian government’s 41.94-percent stake in Indosat by Singapore Technologies Telemedia (ST Telemedia) will soon change the atmosphere of the country’s mobile business.
Both ST Telemedia and Singapore Telecommunications (SingTel) are subsidiaries of Temasek Holdings, the investment holding arm of the Singapore government, and both companies now have mobile investments in Indonesia.
Prior to the Indosat acquisition, SingTel acquired 35 percent of Telkomsel, the country’s mobile market leader.
The acquisition of the Indosat stake will allow Temasek Holdings to control Indosat’s mobile subsidiaries-Satelindo, the second-largest mobile carrier, and Indosat-M3 (IM3), a new GSM 1800 MHz entrant.
Commenting on the acquisition, Lee Theng Kiat, ST Telemedia’s president and chief executive officer (CEO), said the investment will dramatically transform Indonesia’s telecommunications scene and service standards into a more competitive and customer-driven environment amid criticism from Indonesia’s Business Competition Supervisory Committee (KPPU) that the acquisition will allow Temasek Holdings to monopolize the country’s mobile business.
In total, Temasek Holdings now has control over roughly 80 percent of Indonesia’s mobile market through ownership in the three mobile carriers. As of June this year, the three carriers generated about US$521 million in total revenue.
