Telekom Indonesia Decides Against Iranian Invesment

Indonesia's state-owned telco, PT Telekomunikasi has decided not to pursue an option to buy a stake in Iran's dominant telecoms operator, Telecommunication Company of Iran (TCI) after deciding that the risks outweighed the potential rewards.

An official with the State Enterprises Ministry, who declined to be named, told the Jakarta Globe that the political situation in Iran made an investment too risky.

The Iranian government has been trying to sell a 50% stake in TCI. Based on earlier statements, any foreign bidder would be limited to a 35% stake and would have to enter into a partnership with a local firm. The company recently floated a 5% stake on the Tehran stock exchange.

The successful bidder will be able to appoint three directors to the five-man board - and take management control of the firm.

"The scheme [offered by the Iranian government] for purchasing the stake keeps changing," the source said. "Under the first proposed scheme, Telkom was to be appointed as the operator and would jointly provide funding with a local pension fund firm so that we could bring our expertise there. Telkom was very serious about doing that," he said.

"The political situation in Iran after the election also increased the risk too much compared with the reward," the source said.

On the web: Jakarta Globe

Posted to the site on 27th July 2009