Telkom reviews Singtel's offer

Telkom reviews Singtel's offer

JAKARTA (JP): The board of commissioners of state-owned
telecommunications company PT Telkom is considering Singapore
Telecommunications' (Singtel) offer to buy out KPN NV's shares in
cellular company PT Telkomsel which it controls, according to the
former's top executive.

Telkom president Muhammad Nazif said that the company's board
of commissioners was currently discussing whether or not to use
Telkom's first priority rights to purchase KPN's shares in
Telkomsel, the country's number one cellular company.

"If the board of commissioner decides to use its rights, that
means Telkom will buy the shares from KPN," he said.

Nazif explained that as a majority shareholder, Telkom has the
first priority to buy out KPN's shares if it so wishes. Telkom
owns 77.7 percent of Telkomsel.

He said that Telkom's board of directors had already decided
not to buy the shares, and that it was now up to the board of
commissioners to decide.

Singtel earlier said that it had held talks to buy the 22.3
percent shares with KPN, a member of Dutch telecoms group,
possibly for about US$600 million.

Analysts said that funding would not be a problem for the
telecoms giant, and a move to Indonesia was strategically good in
the long term.

Nazif said that if the board of commissioners decided against
the purchase then KPN was free to sell the shares to any
investors, including to Singtel.

"It is KPN's decision to divest its shares and we must not and
will not interfere," he asserted, adding that a partnership with
Singtel in running Telkomsel would not pose a problem.

Telkomsel currently has the largest number of cellular
subscribers in the country with more than 2.5 million
subscribers.

The company targeted 3 million subscribers by the end of the
year.(tnt)