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June 3, 2008

SingTel wants to keep Telkomsel stake

Singapore Telecommunications Ltd (SingTel) plans to take steps to preserve its interest in its Indonesian mobile phone associate Telkomsel, known officially as PT Telekomunikasi Selular, reported Reuters.

SingTel, Southeast Asia's largest telecoms company, was responding to a comment by PT Telekomunikasi Indonesia Tbk (Telkom) that it was keen to buy the Singaporean operator's 35 percent stake in its mobile phone unit Telkomsel.

"SingTel will take all reasonable steps to protect and preserve our interests in Telkomsel," a SingTel spokeswoman said in an emailed response to questions from Reuters.

"The (Central Jakarta District) Court's ruling is wrong and without any credible basis," she added.

Earlier on Monday, Telkom Chairman Tanri Abeng told Reuters on the sidelines of an American Chamber of Commerce lunch in Jakarta it was "very interested" to buy back Telkomsel shares from SingTel.

On May 9, an Indonesian district court ordered Singapore state investor Temasek Holdings and its affiliates to sell its stake in one of two Indonesian mobile phone operators, upholding an earlier ruling by the country's anti-trust body KPPU.

Late last month, the Singapore state investment firm said it had filed an appeal against the district court ruling to the country's Supreme Court. SingTel also said in a separate statement that it had filed the same appeal.

The KPPU ruled last year that the Singaporean firms had breached Indonesia's anti-monopoly law, and one of the mobile phone operators had charged "excessive tariffs".

Temasek, through SingTel, owns a 35 percent stake in Telkomsel. Its wholly owned telecoms unit Singapore Technologies Telemedia (STT) has a 75-percent-owned subsidiary, Asia Mobile Holdings, which holds around 40 percent of PT Indosat Tbk.

Temasek has denied engaging in anti-competitive behaviour, saying it owns minority stakes in both operators.

Telkomsel and Indosat are the country's top two mobile firms.

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