Minister Of Communication And Information Responds To Merger Of Indosat And Tri Indonesia

Menkominfo Johnny G. Plate, wait for the official announcement of the merger of Indosat and Tri. (photo: Kominfo)

JAKARTA - PT Indosat Tbk (ISAT) and PT Hutchison 3 Indonesia finally officially announced the merger. This was welcomed by the Minister of Communication and Information (Menkominfo) Johnny G. Plate.

"We certainly welcome the consolidation of the telecommunications industry, specifically cellular telecommunications. It is a good breakthrough for the efficiency of the telecommunications industry and the acceleration of Indonesia's digital transformation," said Johnny when contacted by VOI, Friday, September 17.

Johnny stated that Indosat and Tri officially merged after obtaining government approval in accordance with applicable regulations. And of course all aspects will be evaluated by the government including spectrum allocation.

"The use of the entire spectrum is made possible by applicable regulations in accordance with the results of the evaluation that will be carried out by the Kominfo Team," said Johnny.

Johnny explained that the Post-Telsiar Job Creation Law encourages efficient use of spectrum resources, infrastructure sharing and tariff management (upper and lower limits).

"We encourage the cellular telecommunications industry to be more efficient and productive," said Johnny.

Meanwhile, Johnny is waiting for the two companies to officially announce the merger. "Given that this is still information, of course we are waiting for an official notification from the two merged companies," said Johnny.

With this merger, the two cellular operator companies will nominate Vikram Sinha as CEO and Nicky Lee as CFO of Indosat Ooredoo Hutchison. Ahmad Al-Neama will continue to carry out his duties as President Director and CEO of Indosat Ooredoo, and Cliff Woo will continue to serve as CEO of H3I until the merger process is complete. Furthermore, if it is approved by Indosat Ooredoo, then Ahmad Al-Neama and Cliff Woo will sit on the Board of Commissioners of the combined company.

Ooredoo Group currently owns 65 percent of and control of Indosat Ooredoo through Ooredoo Asia, a wholly-owned holding company. The merger of Indosat and H3I will cause CK Hutchison to receive new shares in Indosat Ooredoo up to 21.8 percent of Indosat Ooredoo Hutchison.

At the same time, PT Tiga Telekomunikasi will receive new shares of Indosat Ooredoo up to 10.8 percent of Indosat Ooredoo Hutchison. Simultaneously with the business merger, CK Hutchison will acquire a 50 percent stake in Ooredoo Asia by exchanging its 21.8 percent stake in Indosat Ooredoo Hutchison for a 33 percent stake in Ooredoo Asia. Then, CK Hutchison will also get an additional 16.7 percent ownership in Ooredoo Group through a transaction worth 387 million.

Following the above transaction, the Parties will each own 50 percent of Ooredoo Asia, which will be renamed Ooredoo Hutchison Asia and own 65.6 percent of the shares and control of Indosat Ooredoo Hutchison.

At the end of the transaction, Indosat Ooredoo Hutchison will be jointly controlled by Ooredoo Group and CK Hutchison. The combined company will remain listed on the Indonesia Stock Exchange, with the Indonesian government owning 9.6 percent of the shares, PT Tiga Telekomunikasi Indonesia owning 10.8 percent of the shares, and other public shareholders owning approximately 14.0 percent of the shares.