Smartfren Sets Capex at $100m With Loan From China Development Bank
Jakarta. Smartfren Telecom plans to cut its capital expenditure this year following the publicly listed telecommunication operator's massive investment in the expansion of its 4G cellular network last year.
The company, which forms part of Indonesian conglomerate Sinar Mas Group, plans to spend $100 million to extend the reach of its 4G network and acquire smartphones to sell to its customers, Smartfren finance director Antony Susilo said.
Last year, the company spent between $250 million and $300 million to beef up its mobile broadband capacity, rivaling major operators such as Telekomunikasi Seluler (Telkomsel) and XL Axiata, which also began their push in high-speed mobile data connections.
Antony said Smartfren will make use of a loan facility from the China Development Bank Corporation (CDB) to fund its capital expenditure.
The company can still draw up to $180 million from the $300 million loan facility it obtained from the development lender in 2015.
CDB also agreed in May to finance Smartfren's smartphone purchases with another $200 million loan facility, Anthony said.
"We already used $40 million of this facility," he said.
Smartfren is seeking to beef up its sales by pursuing bundling deals with smartphone manufacturers such as Indonesia's Evercoss and China's Lenovo, Smartfren president director Merza Fachys said.
"So every time people buy those phones, a Smartfren SIM card would already be inside it. This would be a mutually beneficial agreement," he said.
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