Written by Yantortla Gui
SINGAPORE (Reuters) – Indonesia’s state-run telecommunications giant Telkom Indonesia is considering selling its stake in its data center business, and expects to complete the sale in the second half of this year.
Telkom’s senior vice president of corporate communications and investor relations, Ahmad Reza, said the group was selecting financial advisors and considering how much of its stake to sell.
The minority stake sale is expected to begin in March and could value Telkom’s data center business at more than $1 billion, according to two people familiar with the plan.
Reza did not comment on the size of the stake, when the sale would begin, or the valuation, but said monetization of the data center business was still under discussion and Telkom had no specific goals.
The acquisition of a global strategic partner and strong financial investor is expected to further expand Telkom’s data center business both regionally and globally.
Telkom, Indonesia’s largest telecommunications group, has 28 data centers, including 23 domestically and five overseas, according to its 2022 annual report.
According to the annual report, the company competes with several companies that are also setting up data centers, including DCI Indonesia, Princeton DG and NTT Communications.
“With the rapid growth of internet penetration around the world, data center businesses have become hot assets for investment, including in Indonesia,” Reza said.
In recent years, global investors’ demand for infrastructure assets such as data centers across Southeast Asia has increased, driven by the region’s growth prospects and the sector’s stable long-term returns.
In September, global investment firm KKR & Co acquired a 20% stake in Singapore Telecom’s regional data center business for S$1.1 billion ($818 million).
(1 dollar = 1.3450 Singapore dollar)
(Reporting by Yantultra Ngui in Singapore; Editing by Kane Wu and Himani Sarkar)
