Indonesia to merge broadband, wireless businesses

A senior executive said on Thursday that PT Telkom Indonesia is planning to combine its broadband and wireless businesses as part of an overhaul of the sprawling state-owned telecommunications company.

The Jakarta-based group is talking to financial advisers about the deal, which could value the combined businesses at several billion dollars, people familiar with the matter said earlier. Telkom hopes to separate its consumer-facing business from one focused more on corporate customers, but they won't be identified as the matter is private, the people said.

The business reorganization comes as Indonesia is poised for growth in areas such as e-commerce and financial technology. According to a report last year by Alphabet Inc., the country's digital economy is set to double to $146 billion in 2025, according to a report by Alphabet Inc. s Google, Temasek Holdings Pte and Bain Co.

Telkom shares have gone up by 9% this year, valuing the company at around $29.6 billion. They rose by 3.1% on Thursday, their largest increase in more than two weeks, on the expectation that the company will benefit from Indonesia's annual budget supporting 30 million small businesses using digital systems by 2024.

The group has a wide range of assets from mobile and broadband to satellite, towers and digital content. A year ago, Telkom's infrastructure services unit, known as Mitratel, raised $1.3 billion in a Jakarta initial public offering.

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