Etisalat will buy 1.13 billion shares in Indonesia's third-largest telecoms

Etisalat is the second-largest publicly traded Arab telecom firm with operations in 16 countries.

Etisalat buys into Indonesian telecoms sector

UAE operator Etisalat said it would buy a 16% of PT Excelcomindo Pratama for $438 million to enter Indonesia, the world's fourth most populous country.

Etisalat will buy 1.13 billion shares in Indonesia's third-largest telecoms firm from Rajawali Group in a deal that could close as early as this month, the operator said in a statement.

Excelcomindo is a 67% owned unit of Telecom Malaysia, whose third-quarter profit jumped 37.5% largely driven by growth in its home market and Indonesia.

Etisalat, the second-largest publicly traded Arab telecom firm with operations in 16 countries including Pakistan, said it wanted to gain exposure to the fast-growing telecoms market in Indonesia, home to 226 million people.

"This investment represents an important step for Etisalat's international expansion strategy into Asia," Etisalat chairman Mohammad Omran said in a statement.

Excelcomindo expected to have up to 14 million mobile phone users in Indonesia by the end of the year, up from 10.5 million at the end of July, its president said in September.

The company has 13 million subscribers and market share of 14% at the end of September, Etisalat said.

Indonesia's telecoms sector has attracted several new entrants. Telekom Malaysia said in April it had bought 7.4% of Excelcomindo, raising its stake in the Jakarta-based operator to 67%.

Khazanah Nasional Berhad, an investment arm of the government of Malaysia, owns 16.8% in Excelcomindo.

Etisalat will be able to nominate one member to Excelcom's board, it said.