Smartfren Owned By Conglomerate Eka Tjipta Widjaja Is Expansive And Welcomed By Jack Ma's Alibaba Group, Forms A Joint Venture

Illustration. (Photo: Doc. Antara)

JAKARTA - The company from the Sinar Mas Group belonging to the late Eka Tjipta Widjaja conglomerate, namely PT Smartfren Telecom Tbk (FREN) is intensively taking corporate actions. This was apparently welcomed by Alibaba Group.

The conglomerate owned by tycoon Jack Ma with Indonesian companies has become more intimate after entering into a joint venture agreement with Smartfren.

The joint venture company formed on December 22, 2021 is PT Nuri Gaya Citra (NGC). In this case FREN formed NGC through its subsidiary PT SF Digital Commerce (SFDC).

Alibaba's ownership in the JV is represented by an affiliated company, namely Fonixtree Digital Singapore Ltd. (FDSL). FDSL itself is a company affiliated with Whale Cloud Technology Co., Ltd, as part of Jack Ma's Alibaba ecosystem.

This collaboration accelerates Smartfren's digital transformation by utilizing Whale Cloud's Business Support System (BSS) and Operation Support System (OSS) technology solutions.

The company is called an important partner in the software services ecosystem of Alibaba Cloud, which focuses on being a leading global company in data intelligence technology, and is claimed to be a world leader in digital transformation.

Director of Smartfren Telecom, Anthony Susilo said that at the initial stage the paid-in capital for this joint venture was Rp. 7.25 billion. Even so, he ensured that the next capital deposit if needed would be determined at a later date.

"NGC was established with the aim of providing digital value-added services to Smartfren customers and is expected to increase customer engagement," he said in an information disclosure on the Indonesia Stock Exchange website, quoted Wednesday, December 29.

Smartfren Chief Technology Officer Shurish Subbramaniam said Whole Cloud has a long experience and qualified technology to support Smartfren's business. With this collaboration, he believes he can pursue Smartfren's vision to become the best cellular operator in Indonesia.

"The latest BSS and OSS solutions from Whale Cloud will bring improvements and changes for the better especially for Smartfren's digital journey," said Shuris in a press release.

For your information, the BSS and OSS solutions from Whale Cloud are equipped with native-cloud technology, 5G ready, end-to-end BSS/OSS suite, large-scale customer relationship management, real-time billing, and multi-channel relationships.

On the other hand, Smartfren can be quite aggressive in carrying out corporate actions. This is because last October, FREN, through its subsidiary Moratelindo, was said to be acquiring a 65 percent stake in a satellite management company, PT Indo Pratama Teleglobal.

Smartfren Telecom Corporate Secretary James Wewengkang in an information disclosure on the official website of the Indonesia Stock Exchange (IDX) confirmed the acquisition plan.

"Reports regarding the imminent transaction involving Moratelindo in the planned acquisition of 65 percent of PT Indo Pratama Teleglobal's shares are true. The company currently owns 20.5 percent of its investment in Moratelindo," he explained.

On September 23, 2021, shareholders approved a plan to take over 145,730 shares equivalent to 65 percent ownership of Indo Pratama Teleglobal from PT Telekomunikasi Nusantara Sejahtera for Rp. 18.21 billion on September 23, 2021.

On the other hand, the collaboration between Alibaba and FREN has strengthened the perception that the Chinese technology company is becoming increasingly popular in Indonesia. Apart from Smartfren, the potential for Alibaba's intervention in other intercompany partnerships in the country also occurs in the e-commerce company PT Bukalapak.com Tbk (BUKA).

Moreover, Alibaba's business entity, Ant Group, through API (Hong Kong) Investment Limited, holds a 13.05 percent stake in Bukalapak. The Alibaba subsidiary became a major investor in a US$1.1 billion funding round at BUKA in August 2017.

The potential for Alibaba's intervention also has the opportunity to strengthen if the company owned by Jack Ma injects funds into Grab.