Jakarta limits QTel control in Indosat to 65pc
Jakarta, October 27, 2008
Indonesia's communications minister on Monday said that Qatar Telecom cannot control more than 65 percent of Indosat, Indonesia's second-largest mobile phone operator.
The decision came as QTel, which owns 40.8 percent of the Indonesian firm, was in the process of holding a tender offer for the rest of Indosat's shares, while awaiting clarification from the government on the foreign ownership rules.
"Qtel can invest in Indosat a maximum of 65 percent and is expected to separate its business entities of mobile and fixed line," Mohammad Nuh told a news conference, adding that the separation would have to be done within two years.
Indonesia limits foreign ownership in the telecommunication sector, with a maximum of 65 percent foreign ownership for mobile phone operators and of 49 percent for fixed-line operators.
Indosat's main revenue-earner is its mobile phone business, but it also has a fixed-line operation.
Qtel bought a stake in Indosat from Singapore Technology Telemedia for $1.35 billion in June, increasing its ownership of the company to 40.8 percent.
Indonesia's mobile phone industry has been enjoying strong subscriber growth in recent years and the number for mobile phone customers is expected to top 120 million by the end 2008 from around 90 million last year. - Reuters