STC’s Indonesian business signs finance agreement worth $1.2 billion
Middle Eastern operator Saudi Telecom Company (STC) is increasing its stake in the rapidly growing Indonesian telecoms market by providing Telecom Indonesia with $1.2 billion to invest in mobile service provider Axis.
Telecom Indonesia, a subsidiary of STC, will spend the money over the next five years helping Axis to grow its business and improve coverage over the complex archipelago of islands that make up the country.
STC said that Axis has over 11 million subscribers already, and provides services in more than 400 cities across Indonesia. The Saudi telco justified the move by pointing out that Indonesia’s economy has seen significant growth over the past decade, growing GDP by an average of 5% annually, indicating a potential for developing a wider mobile subscriber base. In the first quarter of this year alone, claimed STC, the Indonesian economy has grown 6.5%, largely on the strength of foreign investment.
Ghassan Hasbani, CEO of international operations at STC, said that the prevalence of mobile phones and internet services in the country has already had a positive impact on international revenues. “This [new investment] will allow the company to take advantage of the tremendous growth potential characterised by a great deal of competition,” he said.
Amin Bin Fahd Sheddi, VP of STC’s financial sector, said: “This [investment] is considered one of the largest financing operations compatible with the provisions of Islamic law in Asia, and is also among the largest international financing in east Asia.”