Singapore Telecommunications Ltd. (SingTel) has held talks with debt-laden Dutch telecommunication operator Koninklijke KPN NV (KPN) about buying its stake in mobile operator PT Telkommunikasi Selular (PT Telkomsel) of Indonesia, SingTel said in a statement Friday. SingTel said that no definitive agreements have been signed.
KPN holds 22.3 percent of PT Telkomsel, whose majority shareholder is the national carrier PT Telekomunasi Indonesia (PT Telkom). KPN's stake is valued at between US$500 million and US$ 600 million.
PT Telkomsel is the leading mobile operator in Indonesia with 2.2 million subscribers to its GSM (Global System for Mobile communications) network, a 46 percent share of the market. The market is under-penetrated, with around 2 percent of Indonesia's 210 million population owning a mobile phone.
Telkomsel has previously said it would like to attract further investment in its network infrastructure to improve coverage across the huge Indonesian archipelago, which stretches over three time zones from Sumatra in the west to Irian Jaya in the east, comprising over 14,000 islands.
KPN has been actively looking to sell off assets in order to reduce its debt, particularly after the failure earlier this month to complete a merger with Belgian carrier Belgacom SA.
SingTel, which has just completed an $8.6 billion takeover of Australian carrier Cable & Wireless Optus Ltd. (CWO), has extensive mobile operations in Thailand and the Philippines, and a stake in PT Telkomsel would give it a Southeast Asian regional network lacking only a Malaysian operation. Local Singapore media have suggested that SingTel is also in talks to buy Malaysian operator Maxis Communications Bhd.