Indosat Ooredoo Hutchison handed coverage commitment as merger closes

Indosat Ooredoo Hutchison handed coverage commitment as merger closes

Indonesia’s Minister of Communication and Information has detailed a number of expectations and conditions under which the merger was allowed to proceed.

Credit: Indosat Ooredoo Hutchison

Indosat Ooredoo and CK Hutchison have completed their planned $6 billion merger to become Indosat Ooredoo Hutchison after receiving government approval for the move, albeit with certain coverage commitments that will need to be met in the coming years.

The two telecommunications services operators unveiled plans in September last year to merge operations in Indonesia as part of a deal designed to create a “commercially stronger” digital and telecommunications provider.

Under the new banner of Indosat Ooredoo Hutchison, the blockbuster transaction sees the official coming together of Indosat (Indosat Ooredoo) and Hutchison 3 Indonesia (H3I). The deal was expected to be completed by the end of 2021. 

On 4 January, the companies announced the completion of the merger after receiving all the required regulatory and shareholder approvals needed to push it through.

However, Indonesia’s Minister of Communication and Information, Johnny G. Plate, has detailed a number of expectations and conditions under which the merger was allowed to proceed.

One of the conditions specified by Plate was a commitment by the new combined entity to increase the number of its radio transmission sites by at least as many as 11,400 by 2025, with the total number of sites to be no less than 52,885 in 2025.

A second commitment noted by Plate, during a press conference on 4 January, relates to expanding the coverage area served by the company's cellular services to at least 7,660 new villages and sub-districts by 2025.

This would mean that the total coverage area served by the combined telco’s cellular services would need to be at least 59,538 villages and sub-districts in 2025.

Moreover, Plate called for improved service quality by 2025 of at least 12.5 per cent for download throughput and 8 per cent for upload throughput.

It is hoped that Indosat Ooredoo Hutchison’s enhanced scale, financial strength and expertise, combined with its networks, talent and strategic partnerships, will enable the combined entity to become a key telco player driving Indonesia’s digital transformation agenda.  

It is claimed the company will focus on its core mission of delivering world-class digital experiences while connecting and "empowering every Indonesian".

“Today marks the start of an exciting new chapter for Indosat Ooredoo Hutchison,” Vikram Sinha, appointed president director of Indosat Ooredoo Hutchison, said in a statement published on 4 January. “I am honoured to lead a united, larger and more competitive company backed by world-class experience and proven local expertise as we seek to connect and empower every Indonesian.

“Indosat Ooredoo Hutchison is well-positioned to become the most preferred digital telco of Indonesia and a critical contributor to the nation’s 5G ecosystem and digital transformation.  

“We will evoke pride from Indonesians by contributing to the nation’s digital and economic growth while also setting the stage to become one of Southeast Asia’s most trusted telecoms companies,” he added.

Tags TelcohutchisonindonesiaIndosat Ooredoo

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