Jakarta, Indonesia – Indonesian wireless network provider Telkomsel and its parent company Telkom have signed a Conditional Spin-off Agreement (CSA) to spin off and integrate IndiHome into the former to bring about more choices and a better broadband experience, realise digital inclusion in Indonesia, and strengthen TelkomGroup’s business

The spin-off and integration are in line with Telkom’s Fixed Mobile Convergence (FMC) initiative. The transaction will be value accretive for Telkomsel and has received the support of Telkomsel’s shareholders, Telkom and Singtel. 

With the agreement, Business to Consumers (B2C) in Telkom Group will be fully managed by Telkomsel, while Telkom’s operational focus will be on Business to Business (B2B). The FMC initiative is expected to strengthen TelkomGroup’s position as an integrated telco to address customers’ evolving needs and create synergies through its extensive customer network.

The integration will allow the public to access broader broadband services, provide a seamless experience where customers can move freely without worrying about losing service, and realise digital inclusion. TelkomGroup’s business transformation also allows the company to operate more effectively and efficiently through focused business structures, including capital allocation and operational expenses.

“The integration process of broadband services for TelkomGroup’s retail customers is part of Telkom Group’s ‘Five Bold Moves’ business transformation to strengthen the company’s position as a market leader in digital telecommunications in Indonesia,” said TelkomGroup CEO Ririek Adriansyah

Hendri Mulya Syam, president director of Telkomsel also said that the company is enthusiastic about the spin-off agreement. He also added that the company believes that integrating IndiHome services will further strengthen Telkomsel’s position in the telecommunications and digital industry in Indonesia.

“Telkomsel is committed to moving beyond expectations by providing cutting-edge products and services to our customers and consistently developing various integrated innovative services that can accelerate sustainable and inclusive digital access,” Syam added.

Yuen Kuan Moon, group CEO of Singtel, also commented, “We believe this is a rare opportunity for Telkomsel to tap into the high-growth fixed broadband market in Indonesia by partnering [with] the country’s largest broadband operator, which is profitable and cash-generating.”

The CSA is expected to be completed in the early third quarter of 2023, subject to the fulfilment of certain conditions, including the receipt of approvals from Telkom’s shareholders.

Last year, Telkomsel also partnered with fintech company Kredivo to launch the BNPL telco service ‘Telkomsel PayLater’.