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Indonesian operator attempts buyback as merger talks fall apart

One of Indonesia’s largest operators, PT Telekomunikasi Indonesia (Telkom), is aiming to reacquire a 35% stake in its mobile operations from the Singaporean operator SingTel. With competition in Indonesia’s mobile sector rising, Telkom is reportedly aiming to foster closer ties with mobile operator Telkomsel as a means of furthering profit.

However, Telkom’s planned buyback could face opposition, with an official statement from SingTel declaring the operator to be a “long-term, strategic investor” in Indonesia. The Singaporean operator has around 141.37 million subscribers, of which Telkomsel provides around 34.78 million.

Telkom’s renewed interest in Telkomsel may have been spurred by the reported collapse of a proposed deal with Bakrie Telecom which would have seen the two operators merge their CDMA businesses. The proposal had reportedly been under discussion for a considerable length of time, heightening expectations that it would eventually close.

The Wireless Federation reported that the discussions related to the merger “just stopped”; the proposed deal faced hostility from both the country’s regulator as well as Indonesian labour unions, as CDMA services would have been essentially monopolised by the partnership.

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