Indosat ready to go ahead with divestment

JAKARTA (JP): Publicly listed international telephone operator PT Indosat said on Wednesday it was optimistic it would be able to meet the government's requirement to divest of its holdings in at least two non-core businesses by the end of this year.

Company operations and technical director Garuda Sugardo said the company was close to finalizing its immediate divestment plan and had figured out which of its dozens of subsidiaries would be given up. He declined, however, to name the firms.

"We'll be ready to divest of our ownership in the non-core or nonprofitable subsidiaries, as required by the government, on time. Right now, we're still finalizing the plan and talks," he said on the sidelines of a telecoms seminar.

He indicated that Indosat would also be ready to give up its shares in some subsidiaries in which the other state telecoms company, PT Telkom, also held shares.

Together with Telkom, Indosat has invested in at least eight similar companies: VSAT and banking network applications provider Lintasarta, telecommunications consultantcy firm Bangtelindo, VSAT operator and maintenance provider for the oil industry Patrakomindo, personal communications network provider Primasel, mobile phone operator Telkomsel and another mobile phone operator which also provides an international direct dial service, Satelindo.

Indosat also holds stakes in PT Mitra Global Telekomunikasi Indonesia (MGTI) (30.55 percent) and PT Pramindo Ikat Nusantara (13 percent), which are partners with Telkom in its Joint Cooperation Scheme (KSO) projects.

Garuda said Indosat and Telkom were currently undertaking intensive talks on the possibility of each firm divesting of stakes in Telkomsel, in which Indosat had a 35 percent stake.

He refused to disclose Indosat's stance toward the three companies.

"That'll very much depend on the scale of each other's bids," Garuda said, adding that in the case of Pramindo and MGTI, it was now Telkom's call to make the bid.

The government recently called on Indosat to give up its stakes in Pramindo and MGTI because the two firms have closer business ties with Telkom, rather than Indosat.

Sources said Indosat might be willing to give up its ownership in Pramindo and MGTI, but would fight hard for Telkomsel, which is known as the biggest and most profitable cellular operator.

Indosat and Telkom have invested in many telecoms-related companies because in the past the law required other companies to collaborate with them, especially Telkom, if they were to enter the country's telecommunications industry.

According to Garuda, Indosat currently has about 30 subsidiaries, including a Malaysia-based corporate telecoms provider, Acasia Communications; Singapore-based submarine cable repair firm ASEAN Cableship Pte. Ltd.; satellite-based broadcasting and multimedia operator Datakom Asia; satellite- based telecoms provider ICO Global Communication; e-commerce provider Indokomsat Lintas Dunia; satellite-based multimedia service provider Multi Media Asia Indonesia; broadband network and content provider Multimedia Nusantara; and multimedia investment holding firm Indosat Mega Media. (cst)