CK Hutchison to merge Indonesian wireless business with Ooredoo’s PT Indosat in US$6.1 billion deal

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Combined mobile business will have US$3 billion in estimated annual revenue, generate up to US$400 million annual cost savings

Deal will allow combined operations to better compete with Indonesia’s dominant carrier Telkomsel

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People seen outside the headquarters of CK Hutchison in Hong Kong. Photo: AFP

Chad Bray

Published: 12:30pm, 17 Sep 2021Updated: 10:37pm, 17 Sep 2021

CK Hutchison, a conglomerate controlled by Hong Kong’s richest man Li Ka-shing, has agreed to merge its Indonesian wireless telecommunications business with the local operations of Qatar’s Ooredoo to sharpen their competition against the market leader.

The US$6.1 billion transaction will create Indonesia’s second-biggest mobile carrier with combined annual revenue of about US$3 billion in Southeast Asia’s most populous country. It also will create a more formidable rival to PT Telkomsel, the joint venture between state-owned Telkom and Singapore Telecommunications.

“This is a great opportunity to create a stronger and more innovative telco player in Indonesia and will be an accretive transaction for shareholders and other stakeholders alike,” Canning Fok Kin-ning, CK Hutchison’s group co-managing director, said in a statement.

Telkomsel dominates the Indonesian wireless market, with more than 169 million customers and revenue of 87.1 trillion rupiah (US$6.1 billion). Indonesia has a total population of about 276 million people.

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By comparison, CK Hutchison’s Indonesian wireless business reported revenue of HK$9.1 billion (US$1.2 billion) in 2020. In the first half of this year, the Indonesian business generated HK$4.4 billion in revenue, a 4 per cent decrease from the first six months of 2020.

The merger comes nearly nine months after both parties entered into exclusive talks to combine their operations. Under the terms of the deal, the Hong Kong group will merge its unit known as PT Hutchison 3 Indonesia with PT Indosat to form an entity called PT Indosat Ooredoo Hutchison.

CK Hutchison to merge Indonesian wireless business with Ooredoo’s PT Indosat in US$6.1 billion deal

Combined mobile business will have US$3 billion in estimated annual revenue, generate up to US$400 million annual cost savings Deal will allow combined operations to better compete with Indonesia’s dominant carrier Telkomsel

Combined mobile business will have US$3 billion in estimated annual revenue, generate up to US$400 million annual cost savings

Deal will allow combined operations to better compete with Indonesia’s dominant carrier Telkomsel