The Rise of Tower Provider (What Factors Impact Company’s Performance?)

Noel Singgih Haryo Pradono

doi:10.24002/kinerja.v23i2.2384

Abstract

This study aims to determine the effect of Tenants, Financial Leverage, Foreign Owned Subsidiary and institutional shareholder on company’s performance. The population consist of tower provider company listed on Indonesia Stock Exchange and we use time period of 2012 – 2017. Using purposive sampling method, we acquired five companies nonrelated to each other until 2017. We used Eviews 7 to conduct panel data regression statistic. The result showed that only institutional shareholder significantly impacts company’s performance.

Highlights

Telecommunication tower providers (Tower Providers) gained its name on the spotlight on 2012 when PT Tower Bersama Infrastructure Tbk bought a total of 2,500 Towers from PT Indosat Tbk (Indosat Annual Report, 2012)
Tenants do not give significant impact because they have pressure to decrease their expense to maintain their profitability in tight competition
Benefits obtained from debt such as quick cash for acquisition can be out weight by burden from increasing financial cost and foreign denominated debt may not help either with Rupiah condition

Summary

Introduction

Telecommunication tower providers (Tower Providers) gained its name on the spotlight on 2012 when PT Tower Bersama Infrastructure Tbk bought a total of 2,500 Towers from PT Indosat Tbk (Indosat Annual Report, 2012). The purpose of this transaction was to pay Indosat’s financial obligation (Kontan, 2014). In 2017 PT Sampoerna Telecommunication sold all its towers (371 towers) to PT Inti Bangun Sejahtera Tbk (IBST) for 414 Billion Rupiah. These phenomena give a signal that mobile operator will be more focus to conduct their core business, to bring better user experience and fee for their subscribers rather than making investment in tower infrastructure (A.T. Kearney, 2012) (Basaran, Cetinkaya and Bagdadioglu, 2014)

Objectives

Methods

Discussion

Conclusion