Telkom to review Singtel's offer

JAKARTA (JP): The board of commissioners of state-owned telecommunications company PT Telkom is considering a Singapore Telecommunications (Singtel) offer to buy out KPN NV's shares in cellular company PT Telkomsel which it controls, according to the Telkom'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 preferential option to purchase KPN's shares in Telkomsel, the country's number one cellular phone company.

"If the board of commissioners decides to exercise its option, that means Telkom will buy the shares from KPN," he said.

Nazif explained that as the majority shareholder, Telkom had a preferential option of buying out KPN's shares if it so wished. 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 make a final decision.

Singtel earlier said that it had held talks to buy the 22.3 percent shareholding with KPN, a member of a 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 would be strategically attractive 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 outside investor, including 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 customers signed up.

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