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ublicly listed tower company PT Sarana Menara Nusantara'€™s recent acquisition of technology company PT iForte Solusi Infotek is expected to help the company maintain growth amid slow growth in the tower business.

Earlier this month, Sarana Menara (which is controlled by the Djarum Group) through its subsidiary Protelindo acquired a 100 percent stake in iForte, which was owned by diversified conglomerate Saratoga Group.

The acquisition was done after a 62.5 percent slump in net profit to Rp 168.82 billion (US$12.8 million) in the first quarter of this year from Rp 449.96 billion in the same period last year, as costs rose 6.6 percent to Rp 340.86 billion from Rp 319.68 billion.

'€œThe acquisition might be a way to survive in the challenging environment of the tower business,'€ said William Surya Wijaya, an analyst with Asjaya Indosurya Securities.

The overall domestic tower industry may face a headwind this year as rupiah depreciation would put pressure on the industry as most tower materials are sourced from overseas, according to William.

iForte is a technology company providing information, communication and technology (ICT) solutions, including microcells, fiber-optics and very small aperture terminals (VSAT).

The company has more than 300 microcell poles and a 700-kilometer fiber-optic network across Jakarta as of August last year, according to a notice on its website.

The acquisition of iForte by Sarana Menara will add to the business portfolio of Sarana Menara, which has 11,675 towers with 20,325 tenants as of March this year.

'€œThe transaction [acquisition] is expected to help the firm achieve its strategic vision and mission and strengthen its position to become the largest independent tower company in the country,'€ Sarana Menara corporate secretary Arif Pradana said previously.

The firm aimed to pocket between 5 and 12 percent revenue growth this year, compared to around 28 percent last year.

Fiber-optics would become a pivotal business for many tower companies as demand will rise once infrastructure for 4G/LTE is in place.

Besides Sarana Menara, other tower companies have also expanded their businesses into fiber-optic networks and/or microcells.

PT Solusi Tunas Pratama has installed its fiber-optic network in big cities, such as Jakarta, Surabaya, Medan, Bandung and Bogor and previously targeted to make it 2,400 km long by end of last year.

The firm has allocated a Rp 1.5 trillion loan facility to its subsidiary, PT BIT Teknologi Nusantara, to develop its microcell and fiber-optic business.

Another tower company, PT Tower Bersama Infrastructure, has also rolled out its fiber-optic network in the Greater Jakarta area, connecting its telecommunications towers.

Fiber-optics are believed to be able to provide better networks for surging data use, especially with the adoption of 4G technology in the country.

Indonesia'€™s digital universe (the amount of data traffic) is forecast to grow by more than six times, from 84 exabytes last year to 656 exabytes by 2020.

This will also benefit tower businesses as the country will need more telecommunication towers to improve and provide ICT services in remote areas across the archipelago.

Shares in Sarana Menara, traded in the Indonesia Stock Exchange (IDX) under the code TOWR, were at Rp 3,980 apiece on Friday, having dropped 4.1 percent so far this year, underperforming the broader benchmark Jakarta Composite Index'€™s (JCI) 1.7 percent gain.