Tight Competition, Nusantara Infrastructure Investment Business Tower Telecommunication

By : Abraham Sihombing And Aldi Firhand. A | Wednesday, June 13 2018 - 23:55 IWST

PT Nusantara Infrastructure Tbk (META) (Foto Abe)
PT Nusantara Infrastructure Tbk (META) (Foto Abe)

INDUSTRY.co.id - Jakarta - Deden Rochmawati, General Manager of Corporate Affairs of PT Nusantara Infrastruktur Tbk (META), said that the divestment of PT Komet Infranusantara made by META's Board of Directors because of the difficulty of the company to increase its market share due to the tight competition in the cellular telecommunication tower rental business.

"Therefore, the management decided to divest the telecommunication tower business which has been run by PT Komet Infranusantara worth Rp1.05 trillion. Komet Nusantara is a subsidiary of META which has operated 1,450 telecommunication towers, "said Deden.

Deden said that the divestment will result in the company losing revenue from the cellular telecommunications tower business sector which currently has a 10% market share in the cellular telecommunication tower rental sector in Indonesia.

On the other hand, according to Deden, META sees promising opportunities in the water treatment business sector, renewable energy and toll roads which are still the largest contributor of META's revenue.

"Now, we are exploring a number of opportunities to enter the water treatment business, renewable energy and roads," said Deden who was accompanied by a number of directors of META subsidiaries at Media Gathering event in Jakarta, Friday (08/06/2018).

Deden said META's management targets the contribution of double-digit income from the water treatment business which in 2017 contributed Rp41.96 billion revenue or between 5-6% of the 2017 consolidated revenue.

The revenue comes from three water management locations namely Serang, Tangerang & Medan. "The water we take from the river, so as not to disturb the environment and the availability of ground water. Once processed channeled to the PDAM, "said Deden.

To pursue this target, META is currently following a number of drinking water supply tender held by PDAMs in several regions. Three of them are Semarang, Gresik and Lampung.

Related to the value of investment, Deden said the value depends on the capacity of water production to be generated, can reach Rp 100 billion, even up to Rp 1 trillion. "This business opportunity is big and promising because there are 350-400 PDAMs in Indonesia and we are ready to find new opportunities in the business," added Deden.

For the required investment fund related to the expansion, Deden said it has pocketed fresh funds of Rp 1.05 trillion from the divestment of tower business. But according to him the allocation of funds was not solely for the development of water treatment. "We will allocate to businesses that are considered prospective and have good opportunities," said Deden.

Because according to him the renewable energy business, it is also eyeing a number of opportunities for expansion. Similarly, toll road business. In fact, according to Deden for toll road, it will open the opportunity for merger and acquisition action in 2019. "For expansion on toll roads, the value is big, maybe above Rp 1 trillion or even Rp 2 trillion," he said.

In addition to internal funds, META is ready to seek other sources of funding, whether borrowing or taking a right issue in the stock market. In the fiscal year of 2017, Deden said the contribution of toll road business contributed at least 50% of the three toll roads owned.

While this year is estimated to reach 70% -80% due to loss of contribution from the tower business. For that reason, META management hopes that at least in 2019 they will have a business that can replace revenue from lost tower business. (Abraham Sihombing)

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