PT Telekomunikasi (Telkom), owner of Indonesia’s largest mobile operator, is looking to acquire a smaller rival, with local fixed-wireless operator Bakrie Telecom tipped as a potential target. “We’re still in the discussion stage, looking for opportunities,” commented Telkom CFO Sudiro Asno, reports Jakarta Globe. “We’re looking at other smaller operators, but not the big players like [rival operators] PT Indosat and PT Excelcomindo Pratama.” The report notes that the government is keen for consolidation in the sector as the high number of operators in the country is causing high levels of “unhealthy” competition and affecting earnings at the big players.

One option for Telkom being talked up by analysts is for it to merge its CDMA unit, Telkomflexi, with Bakrie Telecom’s Esia, which also uses CDMA. “Primarily the competition for Esia is Flexi, and Flexi has coverage all over Indonesia, maybe 90 percent, whereas Esia has only around 55 percent coverage. With Flexi, Esia will do better,” Bahana Securities analyst Surabhi Chopra told Reuters. Telkomflexi – the market leader in fixed-wireless CDMA – is targeting 16 million to 17 million subscribers by the end of the year. Bakrie Telekom is the number-two player and is targeting 10.5 million customers by year-end.