Indonesia's Telkom eyes acquisitions in SE Asia

JAKARTA - PT Telekomunikasi Indonesia, Indonesia's biggest phone firm, said on Thursday it is looking at acquisitions in Southeast Asia as it sees its domestic market maturing.

Indonesia, Southeast Asia's biggest economy, has become one of the world's most crowded telecommunications markets, with 11 operators fighting for custom in a population of 237 million.

"Telkom is looking for acquisition opportunities in Southeast Asia, including mobile phone providers as our market is starting to mature," said CEO Rinaldi Firmansyah.

"We need a new market but we will not go to Africa. It's too far...But in Asia we're open for any acquisition possibilities," he said on the sidelines of a conference.

Telkom, which rarely comments on regional expansion, tried last year to acquire a stake in Iran Telecom but failed as it lacked backing from Indonesia's government.

Firmansyah did not say how big the firm's warchest would be, but said earlier on Thursday that it sees capital expenditure in 2011 at about US$2 billion.

"We see the same capex for next year at about $2 billion to finance our infrastructure projects as well as maintenance," said Firmansyah.

Telkom needs to invest heavily in telecoms infrastructure such as towers, and is also shifting its focus to data services to earn higher profits as Indonesian subscriber growth slows.

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Vietnam, Indonesia top US companies’ Southeast Asia plans

Vietnam and Indonesia are the top investment destinations in Southeast Asia for US businesses, according to the American Chamber of Commerce.

Companies are “much more positive” on the prospects for regional growth, even as dissatisfaction over corruption increased, according to a business outlook survey published by the chamber Thursday. Improved economic links within Southeast Asia and higher profit expectations are among the reasons prompting businesses to consider expansion, the survey showed.

Asia’s rebound is outpacing much of the rest of the world as exports boost earnings and domestic demand strengthens, benefitting companies including Singapore Airlines Ltd. and Malaysia’s Sime Darby Bhd. The Association of Southeast Asian Nations said its 10-member nations drew 3.6 percent of global foreign direct investment in 2009, up from 2.8 percent in 2008.

Most companies surveyed “continued to expand or expand significantly in Asean over the past two years” and more plan on doing so over the next two years amid optimism about growth, the chamber said. “This business expansion is directed most strongly towards Vietnam, Indonesia, Thailand and Singapore.”

US businesses were mostly satisfied with the availability of low-cost labor except in Singapore and Malaysia, the report showed.

The greatest concern for companies in most countries is corruption, except for Singapore and Thailand. Respondents cited the city-state’s housing costs and the stability of the Thai government as the main worries in those two nations.

“Corruption continues to be a source of great dissatisfaction for respondents, many of whom cited it as a barrier to doing business in Asean,” the chamber said. “The level of local protectionism also remains a concern in a range of countries -- Malaysia, Thailand, Vietnam, and Indonesia.”

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Indonesia is Asia copyright pirate center: survey

A sales assistant arranges compact discs at a stall in a Jakarta mall.

Photo: AFP

Indonesia has the worst record when it comes to protecting intellectual property rights (IPR) in Asia and Singapore the best, a survey of expatriate business people showed Wednesday.

"Indonesia seems to have lost its momentum for cracking down on IPR abuses and making the system more compliant with international standards," Hong Kong-based Political and Economic Risk Consultancy (PERC) said.

Indonesia "has passed new laws that should improve protection of intellectual property, but those rules are not enforced effectively at all, and piracy levels in Indonesia remain among the highest in the world."

Indonesia was given the worst score of 8.5 out of a maximum 10 points compared to 11 other Asian economies in the PERC survey of 1,285 expatriate managers conducted between June and mid-August. Zero is the best possible score.

More advanced economies fared better, with Singapore heading the list with 1.5, followed by Japan (2.1), Hong Kong (2.8), Taiwan (3.8) and South Korea (4.1).

At the other end of the scale, Vietnam was second worst at 8.4, China scored 7.9, the Philippines 6.84, India 6.5, Thailand 6.17 and Malaysia 5.8.

The rankings largely reflect studies by the global software industry, which is alarmed by the easy availability of pirated movies and software in Asian cities despite governments' pledges to crack down.

"Of the emerging Asian countries, Vietnam, Indonesia and the Philippines are all poorly rated not only for their low level of IPR protection but also for such criteria as physical infrastructure, bureaucratic inefficiency and labor limitations," PERC said.

China also came under strong scrutiny because of the sheer size of its economy and the presence of large companies "capable of using pirated technology to compete in foreign markets," said PERC.

"Countries like Vietnam, the Philippines and Indonesia do not have this same ability to inflict global damage through IPR piracy as Chinese companies do."

While China has made strides in clamping down on IPR infringement, its goal of securing transfers of foreign know-how to Chinese firms, using access to its huge market as leverage, remains problematic, it said.

"So far many of the world’s largest multinationals have been convinced that it is worth the risk of transferring key technology to China in order to develop business there," PERC said.

"This policy is not illegal, but it could become a growing source of friction.... The more China consolidates its position as a global economic power, the more other governments will be willing to take off the gloves and fight to protect their interests."

Indonesia is Asia copyright pirate center: survey

A sales assistant arranges compact discs at a stall in a Jakarta mall.

Photo: AFP

Indonesia has the worst record when it comes to protecting intellectual property rights (IPR) in Asia and Singapore the best, a survey of expatriate business people showed Wednesday.

"Indonesia seems to have lost its momentum for cracking down on IPR abuses and making the system more compliant with international standards," Hong Kong-based Political and Economic Risk Consultancy (PERC) said.

Indonesia "has passed new laws that should improve protection of intellectual property, but those rules are not enforced effectively at all, and piracy levels in Indonesia remain among the highest in the world."

Indonesia was given the worst score of 8.5 out of a maximum 10 points compared to 11 other Asian economies in the PERC survey of 1,285 expatriate managers conducted between June and mid-August. Zero is the best possible score.

More advanced economies fared better, with Singapore heading the list with 1.5, followed by Japan (2.1), Hong Kong (2.8), Taiwan (3.8) and South Korea (4.1).

At the other end of the scale, Vietnam was second worst at 8.4, China scored 7.9, the Philippines 6.84, India 6.5, Thailand 6.17 and Malaysia 5.8.

The rankings largely reflect studies by the global software industry, which is alarmed by the easy availability of pirated movies and software in Asian cities despite governments' pledges to crack down.

"Of the emerging Asian countries, Vietnam, Indonesia and the Philippines are all poorly rated not only for their low level of IPR protection but also for such criteria as physical infrastructure, bureaucratic inefficiency and labor limitations," PERC said.

China also came under strong scrutiny because of the sheer size of its economy and the presence of large companies "capable of using pirated technology to compete in foreign markets," said PERC.

"Countries like Vietnam, the Philippines and Indonesia do not have this same ability to inflict global damage through IPR piracy as Chinese companies do."

While China has made strides in clamping down on IPR infringement, its goal of securing transfers of foreign know-how to Chinese firms, using access to its huge market as leverage, remains problematic, it said.

"So far many of the world’s largest multinationals have been convinced that it is worth the risk of transferring key technology to China in order to develop business there," PERC said.

"This policy is not illegal, but it could become a growing source of friction.... The more China consolidates its position as a global economic power, the more other governments will be willing to take off the gloves and fight to protect their interests."