TEMPO.CO, Jakarta - Under the public spotlight for implementing a crucial corporate act at the end of President Susilo Bambang Yudhoyono's term, the chief executive of Telekomunikasi Indonesia claimed to be unconcerned. The share-swap option between the companies, Dayamitra Telekomunikasi (Mitratel) and Tower Bersama Infrastructure (TBIG) nevertheless proceeded, although a member of its board of commissioners disapproved of the move.
Intra Utoyo, acting CEO of Telkom insisted no politics were involved in the transaction. In an interview with Tempo reporters Akbar Tri Kurniawan and Gustidha Budiartie last week he clarified the motives behind the share-swap transaction. Excerpts:
Why did Telkom insist on selling its tower business after it had previously failed?
Actually, we had long wanted to let go of our tower business so it can grow. This is now a supporting business and hopefully, if we let it go, it can give us added value. Under Telkom, our EBITDA (earnings before interest, taxes, depreciation, and amortization) could only increase five times, but if we let [the tower business] go, we can increase 17 times.
Why are Solusindo Kreasi Pratama and TBIG, two companies affiliated with Wahyu Sakti Trenggono, always given special treatment?
That's not true. In the past we were interested in buying Solusindo but the commissioners disapproved of the idea. So, we have actually been quite consistent about this tower business. Now we have a chance and that company is opening up.
Why were only three investors invited to participate in the bidding?
It was a long process at the start and finally only those three were shortlisted. We stressed that the investor should be a company, because don't forget at Telkomsel, a subsidiary of Telkom, there is also Singtel, which must look out for its own interest. So, we had two choices: go public or do a backdoor listing.
In the process of letting go of Mitratel, TBIG was suddenly selected without informing the other two contending investors.
It must be remembered that this was not a goods procurement bidding and the process is not closed yet. We are seeking a partner which can cooperate for the long term, and together build the tower business. So, if it doesn't work out with TBIG, it doesn't mean we go directly to the second choice.
So, how did TBIG get selected?
We looked at its value. So, what we did was a share swap, not sold it permanently. So we cannot just look at the highest bidder alone. We also predicted how the share ownership bids would be in the future and TBIG's offer was interesting because by it, we can keep on buying a bigger portion of the shares. This was not offered by the other bidders.
Isn't this transaction costly?
This is what many don't understand. From this transaction, our towers have been rated much higher than other operators. Every tower is priced at Rp2.4 billion up to Rp2.8 billion.
Why doesn't the company just go public?
We have studied this, assisted by Bahana Securities, and there is a significant difference compared to the share swap. In terms of value, business certainty, it needs a long-time process. Meanwhile, with our currency pegged to the US dollar, we keep losing more money.
But why was it implemented at the end of the presidential term?
Because now we can easily get a permit, in accordance with the Minister's Decree dated October 9, this year.
Did any member of the board reject the plan?
No. We routinely report our activities to the board of commissioners. If one of the members disapproved of it, well, they are allowed to voice their differences of opinion.
What about charges that TBIG was selected because of its strong political network and lobby initiatives?
Our consideration would be purely from the business side. Please do your calculation and then compare. Furthermore, the entire process has been submitted for further evaluation to the BPKP (Finance Development Controller) and the attorney general so as to ensure more transparency. (*)
