Indosat Ooredoo sells off 4,200 towers for $750 million

Indonesian telco enters into sale and leaseback arrangement for a decade with Edge Point Indonesia.
Written by Chris Duckett, Contributor

After a competitive tender process, Indosat Ooredoo has entered into a sale and leaseback arrangement with Edge Point Indonesia for over 4,200 of its mobile towers.

The transaction is valued at $750 million and the lease is in place for a decade.

The telco said the sales would allow it to spend capital on improving its network performance and launch "innovative new digital solutions" for customers.

"The deal marks the third and final sale of assets from Indosat Ooredoo's high-quality tower portfolio that moves us towards a more asset-light model and greater focus on delivering outstanding mobile digital services to our customer," president director and CEO Ahmad Al-Neama said.

In 2019, the telco sold off 3,100 towers under a similar agreement for 6.4 trillion Indonesian rupiah in cash, which is in the order of $450 million at the time.

Last month, the Qatar-based Ooredoo Group reported its Indonesian arm had seen revenue increase by 4% to QAR7 billion, approximately $1.9 billion, during the 2020 financial year, while EBITDA jumped 11% to QAR3.2 billion. During the year, Indosat Ooredoo entered into an "exclusive and non-legally binding" agreement with CK Hutchison to merge their respective Indonesian businesses.

Around the world, telcos are increasingly looking to flog off, or monetise, existing fixed infrastructure for capital.

In Australia, the two largest mobile operators are looking to sell parts of their mobile tower footprint.

Optus CEO Kelly Bayer Rosmarin said in November while the towers were still necessary, the company received no competitive advantage from having them, and there was a "stronger monetisation opportunity" from having a specialist company look after those assets.

"This is a structure that's been used around the world to keep them managed very effectively and efficiently, and so we're really looking to take advantage of that structure to accelerate our ability to invest in building Australia's fastest 5G," she said.

Meanwhile, for Telstra, the company is undertaking a restructure that will see it split into fixed, tower, and service entities.

The company is looking to undertake a process to monetise its towers business during the 2022 fiscal year.

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