Tower Bersama Infrastructure Eyes Tower Construction & Acquisition
Tower Bersama Infrastructure, a leading independent telecommunication tower developer in Indonesia, set aside IDR 1 trillion (approx. USD $74 million) for the development of new telecommunication towers in 2018. Meanwhile, the company is also ready to acquire towers from its domestic counterparts.
Helmy Yusman Santoso, Chief Financial Officer at Tower Bersama Infrastructure, said the company plans to build 1,000 telecommunication towers on the islands and regions outside Java. As each tower is estimated to require an investment of about IDR 1 billion, Tower Bersama Infrastructure prepared IDR 1 trillion in total. These funds originate from the company's internal cash reserves as well as bank loans. The company also eyes 2,500 new tenants.
In full-year 2017 Tower Bersama Infrastructure constructed 1,200 telecommunication towers. Hence, at the end of 2017 the company owned a total of 13,318 towers with the total number of tenants reaching 22,696. The company's biggest customers are Indonesia's leading telecommunication providers Telkomsel (unit of Telekomunikasi Indonesia), Indosat Ooredoo and XL Axiata. Together they account for 84 percent of Tower Bersama Infrastructure's sales.
Santoso added that more than 80 percent of Tower Bersama Infrastructure's telecommunication towers are positioned outside Java, Indonesia's most populous island. Among the soon-to-be-constructed towers, several will be located on Papua, the island that has stayed behind the most in terms of economic and social development.
Besides the focus on the construction of new towers, the company will also keep an eye on possible acquisitions of telecommunication towers. Acquiring towers from domestic counterparts is also part of Tower Bersama Infrastructure's strategy to boost its earnings. For example, the completion of the acquisition of 2,500 towers from Indosat in August 2012 was one of the most important milestones for the company.
Santoso said the company still has USD $200 million in unused bank loans that can be used for the acquisition of telecommunication towers. The only question now is whether there are domestic companies that want to sell their towers.
So far this year, shares of Tower Bersama Infrastructure - listed on the Indonesia Stock Exchange - have fallen 10.12 percent to IDR 5,775 a piece. Nico Omer Jonckheere, Vice President Research and Analysis at Valbury Asia Securities, said the company's stocks remain attractive for investors despite its price-to-earnings ratio (PER) of 22 times as the company is showing rapid and strong growth. Jonckheere put his share price target for Tower Bersama Infrastructure at IDR 7,000 a piece.
Stock Quote Tower Bersama Infrastructure - TBIG: