Cellphone Data Uptake Leaves Sarana Ready to Grow

By webadmin on 03:50 pm Jun 17, 2012
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Francezka Nangoy

Sarana Menara Nusantara, a telecommunications tower provider, expects its expansion this year to match its growth pace of last year as it continues to tap demand for data connection services in Indonesia, an executive said on Friday.

Last year the company added 1,291 new towers, lifting its total to 6,363, president director Adam Gifari said.

“We expect to add [new towers] close to that number,” Adam said.

To reach that number, SMN will build some new towers and acquire others based on a previous agreement with Hutchison CP Telecommunication.

Adam said that this year his company would finish carrying out its agreement with Hutchison, signed in 2010, to buy 1,000 towers. There were about 300 towers left to transfer from Hutchison to SMN, he said. Adam refused to disclose the value of the transaction.

SMN is upbeat about potential demand for telecommunication towers, which it views as supported by trends of increased smartphone and wireless usage.

Adam said, without providing figures, that he expected the total of Indonesia’s smartphone users to double next year from 2011. Users of 3G services were expected to increase to 34 percent of total cellphone users in 2015 from 19 percent at present, he said.

The company has gained shareholder approval to sell as much as 10 percent of its capital to a stand-by buyer.

“We will only do the second shares selling if we need that. We haven’t decided on prices or the stand-by buyer,” Adam said.

To finance its expansion, SMN’s shareholders agreed that there would be no dividend payment this year.

In the first quarter of 2012, Adam said, the company added 404 new towers, bringing its total to 6,767. The number of tenants rose to 11,510 by the end of March from 10,700 tenants by the end of 2011.

Shares in SMN traded flat at Rp 15,500 on Friday. Overall this year, the company’s share price has surged 72 percent.