Indonesia's Telkom keen to expand abroad -chairman
PT Telekomunikasi Indonesia Tbk (Telkom), Indonesia's largest telecommunications firm, is very keen to move beyond its home market and make acquisitions abroad to boost profit growth, its chairman Tanri Abeng said on Tuesday.
Telkom will target emerging markets such as the Middle East and southeast Asia, and could also look for small stakes in companies in developed economies, Abeng told Reuters at a financial forum in Beijing.
He also said the company would meet its full-year profit target after a dip in the third quarter, and dismissed an anti-trust investigation of its mobile phone arm as without merit.
It is in our strategic direction to do acquisitions outside Indonesia, because we're building up our cash reserve and we need to make it more productive, he said.
In the developing world, we're willing to take a little bit more risk with new investment where we can have superior management and technical expertise, let's say in the Middle East or even in the other ASEAN (Association of South East Asian Nations) less developed countries, he added.
Abeng said Telkom would also look to pick up stakes in the range of 5 to 10 percent in telecoms firms in developed markets.
While the company's third-quarter profit fell a little short of expectations, the chairman said full-year performance should meet expectations.
Telkom reported a 6.2 percent drop in third-quarter net profit, hit by lower revenue at its mobile phone business and foreign exchange losses. For 2007, Telkom is expected to post net profit growth of around 26 percent to 13.9 trillion rupiah ($1.52 billion).
There is no fundamental that would lead us to believe that we cannot meet our target, Abeng said. You have to give credit to the new entrants, but we have our plans and strategies and actions to move forward in line with our objective targets.
Its Telkomsel unit has more than half of Indonesia's roughly 75 million mobile phone subscribers, but the fast-growing sector is already crowded and is attracting more investors.
Indonesia's anti-trust agency said last month there was evidence of price-fixing by Telkomsel and its rival PT Indosat Tbk. Its investigation followed a complaint targeting the Singapore government's investment arm, Temasek Holdings, which holds a major stake in both mobile phone companies.
My judgment is that perhaps the regulatory body did not look at the business in the right perspective, Abeng said. In Indonesia, telecoms is almost reaching a perfect competition. How could you fix up anything in a perfect competition? (Reporting by Simon Rabinovitch, editing by Will Waterman)
© Copyright Thomson Reuters 2024. All rights reserved.