Indonesia: SmartFren Telecom targets 5m subscribers; Investors eye XL Axiata towers

Photo by Smartfren Telecom

Indonesia mobile-phone operator PT SmartFren Telecom Tbk (FREN) has set ambitious targets to get five million subscribers by the end of 2016, while some investors are eyeing telecom towers of other operator PT XL Axiata Tbk (EXCL).

SmartFren Telecom targets 5m subscribers in 2016

SmartFren, an LTE provider, has laid down ambitious target to secure five million subscribers by the end of 2016 and expanding its service coverage to 85 cities from 22 currently.

The company’s President Director Merza Fachys said in a press statement, that the carrier has sufficient financial reserves to meet its rollout targets, adding that it is working with a number of smartphone manufacturers – such as Lenovo – to improve 4G penetration across the country.

Smartfren is already working on an Open Market Handset (OMH) partnership agreement with the phone maker, bundling the Lenovo A6010 smartphone in a starter pack deal.

Smartfren booked a net loss of Rp1.34 trillion in the nine months ended 30 September 2015 on the back of an Rp942.66 billion loss in the corresponding year-earlier period. The operator said that its inability to continue 2014’s double-digit revenue growth had weighed heavily on its bottom line.

The publicly listed telco booked turnover of Rp2.27 trillion in the January-September 2015 period, up 3.8% compared to the Rp2.19 trillion it reported a year earlier. Of the total, Rp1.84 trillion was derived from data services, Rp217.62 billion from voice call services and Rp107.84 billion from SMS messaging.

Operating costs, however, climbed to Rp3.06 trillion in the period under review, up from Rp2.91 trillion a year ago, and served to push operating losses higher to Rp783.09 billion from Rp723.52 billion.

Several Companies interested to by XL Asia towers

A number of companies have expressed their interest in bidding for XL Axiata’s telecommunications towers, as the adoption of 4G/LTE network has helped boost business growth in the industry, The Jakarta Post reported.

XL Axiata, the country’s second-biggest operator, is releasing up to 2,500 towers through an open bidding process, which so far has generated huge interest. PT Tower Bersama Infrastructure Tbk (TBIG) finance director Helmy Yusman Santoso, for instance, said the company was interested in making a bid for the towers.

However, he said he could not disclose whether or not his company had submitted a formal proposal to the provider, adding that he could not comment further on the bidding.

While other tower local provider PT Inti Bangun Sejahtera Tbk (IBST) corporate secretary Merciana Anggani, on the other hand, said her company was “currently sizing up the offer.”

XL Axiata finance director Mohamed Adlan bin Ahmad Tajudin, meanwhile, said his company had received a number of offers, both formal and informal. He however said it is too earlier to reveal the progress.

Adlan previously said his company was looking to release between 2,000 and 2,500 telecommunication towers from around 6,500 towers the company currently owned. The bidding started last week.

Adlan did not provide a precise sum that the company expected to raise from selling its towers, but he did refer to the firm’s previous tower auction. The company sold 3,500 towers to publicly listed tower company PT Solusi Tunas Pratama Tbk (SUPR) through a bidding process back in 2014.

XL Axiata generated Rp 5.6 trillion from that sale, meaning that each of the towers was sold for around Rp 1.6 billion. Taking a line from the previous transaction, XL Axiata might expect to pocket between Rp 3.2 trillion and Rp 4 trillion from selling its towers this time around.

The company has previously said in a statement that proceeds from the transaction would be used to pay down debts.

Also Read: 

Indonesia Dealbook : Samsung’s Galaxy Note 5 to be produced locally; Smartfren ties up with Nokia; KompasGramedia joins hands with Brightcove

Indonesia XL Axiata to prepay, convert debt to avoid currency volatility

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.