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Banking & finance
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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

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

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