Win win in Jakarta

PT Telkom and IndosatÆs recent M&A activities have left international observers very excited.

If IndosatÆs and PT TelkomÆs recent moves are anything to go by, investors may soon recover their enthusiasm for Indonesia. In what is being described as a win-win situation, PT Telkom and Indosat have bucked the negative news from the political scene and unwound their cross-shareholdings.

In the process Indosat has gained control of number two cellular company Satelindo, while Telkom has gained control of number one cellular company Telkomsel. This will allow both companies to be re-rated by analysts, and unlock value in the cellular phone area that was previously hidden by their cross-shareholding structure. It will also create two dominant competitors in the Indonesian telecoms sector, improve IndosatÆs debt position, and see it...

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