|
SINGAPORE: Temasek Holdings, SingTel and Singapore Technologies Telemedia have left no doubt that they are determined to challenge the latest ruling by a Jakarta court on their stakes in two Indonesian mobile phone service providers.
In statements issued after the ruling, all three said they were "disappointed" by what they called a groundless verdict.
Earlier Friday, the Central Jakarta District Court turned down an appeal by Temasek and eight companies linked to it. The court upheld the decision last November by Indonesia's anti-monopoly commission (KPPU) that the Singapore companies violated the country's anti-competition law.
Temasek and its affiliates were deemed to have violated Indonesia's anti-competition law by having cross-ownership in two of the country's largest mobile phone operators - Telkomsel and Indosat.
Temasek owns 56% of SingTel, which has a 35% stake in Telkomsel. And Singapore Technologies Telemedia, which Temasek fully owns, controls 75% of Asia Mobile Holdings (AMH). AMH in turn owns 40% of Indosat.
On Friday, the court ruled that Temasek must either sell its stake in one of the Indonesian operators or reduce its holdings in both companies by half within 12 months.
Responding to the latest ruling, Temasek said that it is deeply disappointed by the verdict.
Goh Yong Siang, Temasek's managing director, strategic relations, said: "The facts are Temasek has no shares in Indosat and Telkomsel, and plays no role in their business decisions and operations.
"Telkomsel, in particular, is majority owned by PT Telkom, which in turn is majority owned and controlled by the Indonesian government. Both Telkomsel and Indosat are regulated businesses, operating within the guidelines of the Indonesian Telecommunications Regulatory Authority or Badan Regulasi Telekomunikasi Indonesia (BRTI).
"It is therefore not possible for Temasek to engage in any monopolistic or anti-competitive practices in the Indonesian mobile telecommunications market."
As for ST Telemedia, it said the court "did not take into account the arguments against the KPPU presented by ST Telemedia, AMH and independent expert witnesses".
It noted that it was "invited by the Indonesian government in 2002 to participate in a transparent bid for the Indosat stake", and that it had "fully complied" with regulations.
SingTel also expressed strong objections to the court ruling, saying that it has not been anti-competitive. It noted that there has been a consumer surplus in the Indonesian cellular market in recent years.
Analysts who spoke to Channel NewsAsia noted that the market in Indonesia has strong growth potential and there is likely to be more competition ahead.
Foong King Yew, research director, Gartner Advisory, said: "Today the mobile penetration is about 35%. We expect, by 2011, the mobile phone penetration will be 55%. So clearly, there is still a lot of runway there on the Indonesian market. Competition in the Indonesian market will inevitably increase, and with that margins will inevitably decline as well."
Should Telkomsel and Indosat lose their Singapore partners, analysts said they would lose out.
"My belief is that Telkomsel and Indosat, if one of them loses either SingTel or ST Telemedia as a partner, they would really lose access to a good partner who has great experience in running a telecom business, and also in getting funds for investment in future in the telecommunications sector in Indonesia," said Foong.
On the flip side, Telkomsel currently contributes about 50 percent of the total profits from SingTel's overseas affiliates, and is seen as a growth engine for the telco.
"It will be a very big hit to SingTel if SingTel were to be forced to divest its stake," Foong added. - CNA/ir
|
|
|
