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Telekomunikasi Indonesia buys logistics IT provider

State-owned carrier looks to grow e-commerce portfolio amid fierce competition

Indonesia's state-owned Telekomunikasi Indonesia is pushing deeper into e-commerce with its purchase of logistics IT service provider Bosnet Distribution Indonesia.

JAKARTA -- Indonesia's state-owned telecommunications carrier Telekomunikasi Indonesia, or Telkom, on Friday said it has agreed to buy local logistics information-technology provider Bosnet Distribution Indonesia for an undisclosed sum.

The acquisition will be carried out by Telkom's data center and cloud services unit, Sigma Cipta Caraka, known as Telkom Sigma, the company said in a stock exchange filing. Bosnet provides systems for distribution companies handling fast-moving consumer goods, helping them automate management of salespeople and other processes.

The deal will "strengthen the e-logistic and e-commerce business of Telkom Group," Telkom said.

Indonesia's logistics industry is worth an estimated $163 billion and is poised to grow further as e-commerce catches on. But the archipelago has patchy infrastructure, making it difficult to predict delivery schedules.

Telkom's additional investments in industries related to e-commerce stands in contrast to its main competitors, mobile operators XL Axiata and Indosat, which have mostly pulled out of the market due to bruising competition with foreign players, such as China's Alibaba Group Holding, and the recent arrival of U.S. online retailer Amazon.com in Singapore. Telkom's lucrative mobile unit, Telkomsel, has a commanding lead in Indonesia's mobile phone market, with some 190 million subscribers, enabling it to pour money into new businesses.

Telkom continues to promote its e-commerce site Blanja.com, a joint venture with eBay of the U.S. It also has a venture capital arm, MDI Ventures, which invests in local startups.

Nikkei staff writer Erwida Maulia in Jakarta contributed to this report.

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