Country profile: Indonesia

Indonesia is a fascinating market to study from a towerco perspective, as one of the oldest, most established and yet most dynamic markets. Over the past decade, the country’s mobile network operators have been monetising their towers through tower carve outs and sales and have relied heavily on towercos for the rollout of new sites. A transaction in early 2023 between IOH and Mitratel marked the end of an era, as once the deal closes towercos will own 100% of the nation’s sites.

In addition to building new sites and acquiring MNO owned towers, the country’s leading towercos have further bolstered growth through the acquisition of smaller towercos making for one of the most dynamic tower M&A markets in the world.

Protelindo’s fibre subsidiary iForte acquired IBS Towers, increasing its fibre network to over 170,000km in order to strengthen its fibre to the tower (FTTT) and fibre to the home (FFTH) businesses, along with its 3,000 towers.

Prior to the entrance of DigitalBridge backed EdgePoint Infrastructure in late 2020, there was an expectation that this consolidation would continue until the market was composed of Mitratel, Protelindo and Tower Bersama.

However, a further step was made in the opposite direction in March 2022 as pan-Asian powerhouse EDOTCO made its anticipated move into Indonesia with an acquisition of 1,021 towers from parent company Axiata. Of these towers 859 are owned and 162 are managed by EDOTCO. The towers were priced at US$52.2 million.

In June 2022 it was reported that Protelindo were looking to raise $US1 billion by selling between 15% and 20% of the business. Protelindo’s 2015 acquisition of iForte provided the springboard for the company to grow its fibre footprint and use it to support 3 different business lines, FTTT, FTTH and Connectivity. Protelindo also bought out PT Solusi Tunas Pratama (STP Tower) in 2021, which saw them inherit 6,700 towers and over 9,300km of fibre.

Mitratel (PT Dayamitra Telekomunikasi) is a subsidiary of Telkom Group and a sister company to Telkomsel, Indonesia’s largest operator. Its ambitions of being the largest digital infrastructure are becoming ever realised – in December 2023 the company acquired some 803 towers from independent towerco PT Gametraco Tunggal for US$112 million. 70% of those towers are situated outside the main island of Java. Its expanding towerco portfolio is now complemented by extensive fibre cabling. Miratel acquired 9671km of fibre optic cable also in December to help fulfill its commercial model with a tower business that can achieve a billable ratio of 1.18x.

The company has also grown inorganically, and as well as acquiring sites from its sister company. In August 2022, Mitratel signed a deal to acquire 6,000 towers from the operator, and also completed a 2019 tower deal with Indosat Ooredoo. Additionally, in 2019, they also acquired fellow towerco PT Persada Sokka Tama (PST) and its 1,589 sites.

Mitratel completed their IPO in November 2021, raising US$1.32bn. This included a US$800m commitment from the Indonesia Investment Authority. In February 2021, Mitratel announced plans to invest US$69.5mn of the capital raised from the IPO in rural tower sites in the country. In February 2023, Miratel acquired 997 towers from IOH, which came from the Hutchinson side of the business. Tower Bersama is listed on the Indonesia stock exchange (IBX: TBIG) with two of its portfolio companies Gihon (IBX:GHON - in which Tower Bersama has a 50.43% stake) and PT Visi Telekomunikasi Infrastruktur (IBX:GOLD - in which Tower Bersama has a 51.09% stake) separately listed.

Tower Bersama Infrastructure was formed back in 2004 by the rollup of several Indonesian towercos, and have completed several other acquisitions since. Tower Bersama is listed on the Indonesia stock exchange (IBX: TBIG) with two of its portfolio companies Gihon (IBX:GHON - in which Tower Bersama has a 50.43% stake) and PT Visi Telekomunikasi Infrastruktur (IBX:GOLD - in which Tower Bersama has a 51.09% stake) separately listed. Tower Bersama’s most recent tower deal involved the acquisition of 3,000 towers from IBS Tower, which was completed in April 2021. Following that deal, Tower Bersama reported just over 19,000 owned towers. In May 2022 Australian asset manager, Macquarie, and Canadian pension fund, PSP Investments, spent a combined US$610mn to acquire a minority stake in Bersama Digital Infrastructure, who in turn own a 64.5% stake of Tower Bersama.

This fresh investment was followed by Bersama Digital’s first expansion beyond Indonesia. The company partnered with Filipino investment firm Opti-Teknology to acquire a majority stake in Alliance Tower Corporation (A Philippinesbased towerco) for an undisclosed fee.

EdgePoint Infrastructure was founded in partnership with former EDOTCO CEO, Suresh Sidhu and US investment firm DigitalBridge. In early 2021, EdgePoint Infrastructure announced that it had reached a deal with Indosat Ooredoo to acquire 4,247 towers for US$750mn, the deal having closed in May. This sale marked the final release of towers

from Indosat Ooredoo. EdgePoint Infrastructure acquired Centratama in a series of equity transactions throughout 2021 and In March 2022, Centratama purchased the shares of EdgePoint’s Indonesian operation to consolidate their operations in the country.

American Tower are also exploring entry into Indonesia, yet no formal plans are currently in place. Despite the wealth of towerco activity, there is still a consensus that Indonesia’s networks are under-serviced.