DBS Telkom: Hold; Rp8,600; TP Rp8,500; TLKM IJ

Standoff between SingTel-Telkom on tower sale

According to Bisnis Indonesia , TLKM and SingTel have not reached agreement yet on takeover plan of 9,000 telecommunication towers. SingTel currently holds 35% stake in Telkomsel, with other 65% held by TLKM. Based on Indonesia Government regulation, telecommunication towers must be managed by domestic companies and foreign ownership is prohibited. TLKM is ready to takeover and restructure 9,000 towers, which will be operated under its subsidiary, Mitratel. For this purpose, TLKM has to allocate budget around Rp800m – Rp2bn per unit of tower or in total amounting to Rp2.5-3.78tr as takeover compensation to SingTel. However, the negotiation has not culminated into an agreement between the two companies.