Indonesia’s major telco Indosat Ooredoo Hutchison enters JV to build fibre infrastructure
Venture with Arsari Group and Northstar Group will allow Indosat to monetise its fibre assets
[SINGAPORE] Indosat Ooredoo Hutchison (IOH), one of Indonesia’s largest telcom operators, is partnering Indonesian conglomerate Arsari Group and Singapore-based private equity firm Northstar Group to spin off its fibre infrastructure into a new standalone company.
Tuesday’s (Dec 23) announcement marks one the largest digital infrastructure transactions in Indonesia.
The new entity, known as FiberCo, will operate a comprehensive and integrated network spanning over 86,000 kilometres across Indonesia.
Around 45 per cent of the network is located in Java, the country’s most populous island and where the current capital Jakarta is located, with the remaining 55 per cent spread across non-Java regions, positioning FiberCo as a key player in expanding connectivity beyond Indonesia’s main economic hubs.
Under the deal, Indosat will carve out its fibre assets into a new entity, FibreCo, valued at an enterprise value of about 14.6 trillion rupiah (S$1.12 billion).
The telco will retain a 45 per cent stake while Arsari Group and Northstar Group will own a collective 45 per cent stake in FiberCo with the rest being a minority free float.
The deal underscores a broader trend of Indonesian telcos unlocking value from passive infrastructure assets through partnerships with conglomerates and private investors as demand for data, cloud services, and AI applications surge.
The consortium said in a statement on Tuesday that the partnership marks a significant milestone in the collective effort to reinforce Indonesia’s digital backbone.
Indonesia has a Digital Vision 2045 initiative that aims to build out infrastructure to bolster the country’s development into a digital-technology based economy, and to also support digital inclusiveness for citizens.
The move allows Indosat to monetise its fibre network and free up capital to accelerate its 5G rollout and support its ambition to become an AI-driven telco company.
Vikram Sinha, Indosat’s CEO, said: “This strategic transaction is instrumental in advancing Indosat’s growth objectives and effectively future-proof its business with the the proceeds fuelling crucial investments in 5G rollout and acting as a foundation for Indosat’s AI north star.”
Under the CEO, Indosat has been expanding its network by constructing more cell towers to try and reach rural Indonesians.
Sinha has also spoken publicly on several occasions on wanting to leverage AI to fuel the company’s growth.
For the Arsari Group, the deal marks a strategic expansion into digital infrastructure, adding to a portfolio traditionally anchored in commodities and logistics.
The group is controlled by businessman Hashim Djojohadikusumo, the brother of Indonesia’s President Prabowo Subianto.
“Under this partnership, Arsari group intends to serve as part of the physical backbone of Indonesia’s next growth phase–supporting enterprise productivity, digital inclusion, public service delivery, and the emergence of AI-driven economic activity,” said Aryo Djojohadikusumo, Arsari Group’s COO and deputy CEO.
Northstar Group, the third party in this venture, is a major Singapore-based private equity firm. The company is invested in several sectors of the Indonesian economy and has a stake in Indosat through PT Tiga Telekomunikasi Indonesia.
Additional reporting by Elisa Valenta
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