KUALA LUMPUR - Telekom Malaysia said on Monday its ambitious forays into neighbouring Indonesia and India signalled a shift in its overseas investment strategy to Asia from Africa to boost earnings.
"We are moving away from Africa to invest closer to home. The two investments (in Indonesia and India) will increase our regional presence," Telekom chief executive officer Abdul Wahid Omar told reporters.
"This restrategising was done after much deliberations. The South Asian and Southeast Asian markets do hold quite a lot of promise," he added.
But Abdul Wahid said it would not be until 2006 that the company's Indian and Indonesian investments begin to contribute to its earnings.
Telekom's overseas business is carried out by investment arm TM International.
On Saturday, Telekom and the Singapore government's Singapore Technologies Telemedia Pte. Ltd., agreed to buy 47.7% of Idea Cellular Ltd., India's fifth-largest mobile phone operator, for about 390 million dollars.
ST Telemedia would hold 60% in the consortium that will take the stake in the Indian company.
On Thursday, Telekom Malaysia said it would buy a 27.3 percent stake in Indonesia's PT Excelcomindo Pratama, Indonesia's third-largest mobile operator, for 314 million dollars.
Detailing Telekom's shift to Asia, Abdul Wahid said Telekom would digest these two acquisitions before looking at any other major investments.
"We have no plans for the moment to look for other overseas acquisitions," he said, though he added the company would not ignore any attractive proposals.
Asked if he was disappointed with Telekom?s outing in Africa, he said it was mixed.
"We have had success despite our disinvestment in South Africa and perhaps not so successful in some countries as in Ghana where we were asked to relinguish control a few years back," he said. "We hope the two acquisitions will compensate for the loss of earnings from SA Telkom."
Telekom sold off its interest in the South African telecommunications firm earlier this year.
Abdul Wahid said overseas operations contributed 29% of Telekom Malaysia?s 2003 earnings, though this is projected to fall to 21-22% in 2004.
In Indonesia, he said Telekom plans to raise its stake in Indonesian mobile phone carrier PT Excelcomindo Pratama to 51 percent next year.
Abdul Wahid said the acquisition would be financed through internal funds and the company had eight billion ringgit available, but did not rule out the possibility of a bond issue.
PT Excelcomindo had 4.2 million subscribers, or a 16 percent market share, as of the end of September. Almost all of its customers are subscribers to its pre-paid program.
IDEA Cellular had 4.4 million subscribers and a 10 percent market share as of the end of September.
Telekom said the investment in IDEA will allow the Indian carrier to expand its network.