IndonesiaÃ's Supreme Court has rejected the bulk of an appeal by Singapore's Temasek Holdings that is had violated anti-monopoly laws due to its indirect holdings in two Indonesian mobile network operators, Telkomsel and Indosat.
Singapore Telecom, which is 54% controlled by Temasek Holdings owns 35% of Telkomsel - while Temasek Holdings holds a direct 30.6% stake in Indosat, through a holding company, Asia Mobile Holding
Temasek had argued that as it does not direct the commercial activities of its subsidiaries, it could not be found to have breached the 50% limit on foreign ownership.
Speaking last November, the company said "No evidence has been proffered to show abuse of Indosat's and Telkomsel's dominant position. Although Temasek can't speak on behalf of Indosat and Telkomsel, information in the public domain demonstrates that the allegation of anticompetitive conduct by the two telcos is baseless,"
"Temasek is an investment company which doesn't direct, control, influence or coordinate the commercial decisions of its direct subsidiaries, let alone the companies in which its subsidiaries invest," it said.
Earlier this year, the Central Jakarta District Court of Indonesia had also denied an appeal by Temasek Holdings, ruling that Singapore's state-owned investment firm must sell or reduce its stakes in the two mobile networks.
Following that decision, Qatar Telecom (QTel) announced that it would pay US$1.8 billion to buy Asia Mobile Holding. Previously, QTel held one-quarter of Asia Mobile's stake, while three-quarters was owned by Singapore Technologies Telemedia. QTel now owns 40.8% stake but is limited by law to owning no more than 49% of the company.
The court decision may affect QTel's investment as the Indonesian competition body KPPU had earlier put a 10% cap on any single investor buying out any of Temasek Holdings stakes in its mobile subsidiaries.
The Indonesian court is expected to hold a press conference later today to clarify the details of the ruling.
According to figures from the Mobile World subscriber tracker, Telkomsel ended the first half of this year with just under 52.5 million customers, and a market share of 45%. The other operator, Indosat ended the same period with some 32.4 million subscribers - representing a market share of 27.9%.
Posted to the site on 12th September 2008
Posted to: www.cellular-news.com/story/33592.php