Tower Bersama, Protelindo in Race to Buy XL Axiata’s Towers in Indonesia
(Source: Online WSJ) Some of Indonesia’s largest telecommunications infrastructure companies including Tower Bersama Group are among the bidders to buy some of the telecom towers of XL Axiata Tbk. in a deal that could be worth about $500 million, people with knowledge of the matter said Wednesday.
XL Axiata, Indonesia’s second-largest mobile phone network by subscribers, began seeking buyers for the towers last month as part of efforts to cut its debt levels. The company, 66.5% owned by Kuala Lumpur-based telecom operator Axiata Group Bhd., had debts more than twice the size of its equity in the first half of this year, according to company reports.
The sale comes as mobile operators globally sell or spin off their capital-heavy tower investments to cut costs. Many of them are opting to share towers–renting them from other telecommunication firms or tower companies instead of investing in infrastructure especially in emerging markets.
“The bidding period for bidders is still open,” XL Axiata’s vice president for corporate communications, Turina Faruk, said. She declined to comment on the names of the bidders. One of the people with knowledge of the deal said that the company is hoping to receive final bids next month and close the transaction by the end of the year.
All the bidders are Indonesian companies, because the country forbids foreign ownership of telecom tower assets. Apart from Tower Bersama, one of the largest tower companies in Indonesia, other bidders include PT Solusi Tunas Pratama Tbk or STP, Protelindo, a unit of PT Sarana Menara Nusantara, Retower, a unit of PT Centratama Telekomunikasi Indonesia, and Komet Infrastructure Nusantara, a unit of Nusantara Infrastructure, who are also in the telecommunication tower business in Indonesia.
Tower Bersama declined to comment, while STP and Protelindo weren’t available for comment. A spokesperson for Nusantara infrastructure declined to confirm or deny the company’s involvement, but said that the firm was in the process of negotiating acquisitions. An official at Retower confirmed that the company was in the race to buy the tower assets from Axiata and said the firm has signed a nondisclosure agreement.