DUBAI: Saudi Telecom Co (STC) has begun steps to sell its Indonesian business, banking sources said yesterday, as the state-owned firm posted a 41-percent drop in second-quarter profit.
Saudi Telecom has invested heavily in its Indonesian unit but competitive pressure has dragged on earnings. Indonesia has 10 operators vying for mobile phone subscribers, making it one of the most competitive markets in Asia after India.
Saudi Arabia’s biggest telecoms operator took a non-cash charge of SAR1.1bn ($293.30m) in the quarter to write down the value of its investments in Indonesia’s Axis Telekom and Indian mobile phone operator Aircel.
STC has moved its 84-percent majority stake in Axis to a “held for sale” category, it said in a statement late on Sunday.
A sale process for Axis was ongoing, two banking sources said yesterday, adding that the business may generate interest among existing operators in the country. The sources spoke on condition of anonymity as the matter was not publicly disclosed.
“We are looking into rationalisation of STC’s international portfolio,” said STC Group Chairman Abdulaziz Al Sugair. “Management is evaluating options for some of these investments in order to take appropriate actions in the best interest of the shareholders.”
Profit for the second quarter dropped to SAR1.4bn ($373.29 m) from 2.4bn in the same period
last year. REUTERS
