T

he country'€™s largest telecommunications operator, PT Telekomunikasi Indonesia (Telkom), is optimistic that it will be successful in its bid to acquire one of New Zealand'€™s largest cellular operators, thanks to links that the company'€™s new Australian business has there.

Telkom, which aims to have a presence in 10 foreign countries by year-end, is currently undergoing a process of due diligence to acquire a 27 percent stake in one of New Zealand'€™s largest telecommunications operators.

Telkom president director Arief Yahya refused to disclose whether the telecommunications operator was Telecom New Zealand, currently known as Spark New Zealand, as previously reported by a number of media outlets, saying that his firm had a binding non-disclosure agreement with the targeted operator.

Arief said the business expansion to both Australia and New Zealand was an important move because the two countries offered substantial market value.

'€œFor the BPO [business process outsourcing] business in Australia, for example, they have a total value of US$2.3 billion, which is currently dominated by Philippine and Indian companies,'€ he said, adding that only a few Australian companies were entering the business.

Telkom recently acquired what is likely to be a 75 percent stake in Australia-based BPO provider Contact Centers Australia (CCA), in a deal worth A$11 million (US$9.7 million).

The CCA, which is headquartered in Sydney, also operates in the New Zealand capital, Wellington.

The BPO provider has a number of large corporate clients, including Colgate, Rio Tinto, Pfizer Australia and Yellow Brick Road.

Telkom'€™s and the CCA'€™s presence in New Zealand is expected to offer leeway to its acquisition plan, according to Arief.

'€œWe believe that by having a foothold in New Zealand, we will have a stronger bargaining position to achieve our next target [the acquisition],'€ he told The Jakarta Post.

Syarif Syarial Ahmad, president director of PT Telkom International (Telin), previously revealed that the company had eyed a New Zealand cellular operator that controlled around 60 percent of the telecommunications market in the country.

According to a New Zealand Commerce Commission report in 2012, British firm Vodafone had acquired 42 percent of New Zealand'€™s telecommunications market, followed by Spark New Zealand and Two Degrees Mobile with 37 percent and 20 percent, respectively.

Vodafone, which bought full ownership in TelstraClear from Australian Telstra in 2012, currently has 2.3 million subscribers, according to its website.

Telkom, through Telin, operates in Malaysia, Singapore, Timor Leste and Hong Kong, besides Indonesia.

It aims to launch operations in Saudi Arabia, Macau and Taiwan this year.

Telkom'€™s average annual capital expenditure is Rp 20 trillion, 10 percent of which is spent on its backbone business and access infrastructure; 20 percent on information technology (IT), media and
overseas expansions, and the remaining 70 percent is spent on its cellular business.