COMPANY TO WATCH: TELKOM/INDONESIA
Telkom, Indonesia’s largest phone company, has thrived despite the government’s decision in 2002 to end its monopoly on fixed-line services. Telkom has expanded into the voice-over-Internet international arena and holds a 65% stake in Telkomsel, the largest mobile phone operator in Indonesia. Telkom also operates a limited-mobility CDMA-based “enhanced cordless” service in many cities.
Telkom, which is controlled by the government, reported a 62% rise in net income for the third quarter of 2006 compared with the same period in 2005. Its shares are listed on the Surabaya Stock Exchange, and its depositary receipts trade on the New York Stock Exchange and the London Stock Exchange. Telkom has a market capitalization of $18 billion.
Indonesia’s anti-monopoly agency announced in December that it would investigate a complaint that the country’s leading mobile operators are fixing prices. The complaint targets Temasek, Singapore’s state investment arm, which owns stakes in both Telkomsel and Indosat, Indonesia’s second-largest telecom. The complaint recommends that Temasek should be forced to divest its stakes in both companies.