A GIC-backed Indonesian telecom tower company is seeking local partners to expand in Southeast Asia, a top executive told DealStreetAsia.
Hendra Purnama, chief investment officer at Dayamitra Telekomunikasi Tbk (Mitratel), said the company has received several deal proposals but nothing has been finalized. "Many companies are approaching Mitratel," he said, "but we haven't found the ideal partner yet as none of the proposals received so far is interesting to us."
In an interview with DealStreetAsia last year, Purnama said the company was looking to acquire companies in Asia as part of a plan to expand its business abroad. He did not give further details.
This time, Purnama said the company is more interested in expanding in other parts of Southeast Asia, such as Malaysia, Thailand and the Philippines, due to proximity as well as their similar cultures and rung on the technological development ladder. "We are waiting for the right opportunities from these countries, whether to acquire companies or telecom tower assets," he said.
Currently, Mitratel is focusing on growing its business domestically by acquiring Telkomsel's tower assets as well as buying smaller players. "We are open for opportunities to acquire smaller players which are facing the pressure of competition," Purnama said.
Mitratel is the largest telecom tower company in Indonesia, with over 37,000 towers and 29,000 fiber optic lines. It plans to acquire around 2,600 of Telkomsel's towers. Previously, it bought 997 of Indosat's towers for 1.64 trillion rupiah ($103.5 million).
For the first nine months of 2023, Mitratel booked a profit of 1.43 trillion rupiah, up from 1.22 trillion rupiah for the year-earlier period. The company's revenue increased 12% to 6.3 trillion rupiah from 5.6 trillion rupiah for the first nine months of 2022. All the added telecom towers and fiber optic lines boosted revenue.
Mitratel was listed in November 2021 after raising 18.77 trillion rupiah in its initial public offering. Telkom Indonesia holds 71.8% of Mitratel, the Indonesia Investment Authority (INA) owns 5.97% and Singapore sovereign wealth fund GIC 5.56%.
Mitratel could be the only local telecom tower company harboring global ambitions at the moment. Other players, such as PT Tower Bersama Infrastructure and Sarana Menara Nusantara, are still focusing on their domestic business.
In May 2022, Saratoga-backed Bersama Digital Infrastructure Asia, formerly known as Provident Consolidated Holdings, bought a 62.38% stake in Tower Bersama for 45.22 trillion rupiah.
Telecom tower players are continuously investing in fiber optics, given the growth of the country's bandwidth consumption. Djarum Group-backed Sarana Menara Nusantara, which already has a fiber optic network of over 179 kilometers, plans to spend around 6 trillion rupiah this year to develop towers and fiber optic networks in Indonesia, Adam Gifari, president director of the company, told the media earlier in August.
The rush to expand telecom networks comes as Starlink, which is backed by Elon Musk's SpaceX, is expanding its satellite technology to provide better Internet networks in remote areas of Indonesia.