Government plans to sell another 8% in Telkom

JAKARTA (JP): The government will sell another 8 percent of its shares in publicly listed telecommunications company PT Telkom, company president Muhammad Nazif said on Monday.

The newly appointed Nazif did not mention the time frame of the divestment plan, saying the agenda would be discussed with the Office of the State Minister of Investment and State Enterprises Development.

"The stocks are likely to be sold through the New York and London stock exchanges," he said after he and the president of the other state owned telecommunications company, PT Indosat, met with President Abdurrahman Wahid.

Nazif and Indosat president Hari Kartana reported to the President the latest development in the country's telecommunications sector on the forthcoming Indonesian Telecommunications Media and Information Technology Conference and Exhibition.

The government currently owns a 65 percent stake in Telkom while the remaining 45 percent is owned by the investing public.

The government sold 9.62 percent of its stakes in Telkom at Rp 3,650 per share in May last year to foreign institutional investors, in which it raised Rp 3.2 trillion, reducing its stake in the company to the present level.

Telkom recently reported a 1999 consolidated net income of Rp 2.17 trillion, a turnaround from a net loss of Rp 1.16 trillion in 1998.

The company currently holds a monopoly to provide domestic fixed line telecommunications services nationwide until 2010 and domestic long distance services until 2005.

Nazif said Telkom had not planned to increase its telephone rates this year.

"There will be no rate increase at least until the end of this year," he said.

Telkom, which had total assets of Rp 6.61 trillion as of December 1999, is listed on the Jakarta, New York and London stock exchanges.

Meanwhile, the Indosat president said his company expected to earn Rp 2 trillion (US$253 million) in net profit this year, as against Rp 1.37 trillion gained last year.

"In order to achieve the target, we will increase our operating efficiency and explore the possibilities of getting a foreign strategic partner," Hari said.

Indosat reported last week its first quarter net profit of this year was Rp 433.8 billion, reflecting an increase of 16 percent from Rp 374.1 billion in the corresponding period last year.

Indosat and its subsidiary PT Satelindo currently hold the exclusive right to provide international telecommunications services until 2004.

The company is listed on the Jakarta and Surabaya stock exchanges, while its American Depository Shares (ADS) are listed on the New York Stock Exchange. (prb/cst)