House Supports Indosat Buy-Back
Thursday, 01 February, 2007 | 16:58 WIB

TEMPO Interactive, Jakarta: The House Budget Commission has said it considers that the shares ownership domination by Singapore Technologies Telemedia Pte. Ltd (STT) is too large.

Telecom’s involvement in PT Indonesian Satellite Corporation Tbk. (Indosat) has made international Internet network tariff in Indonesia more expensive.

The result of this is that internet growth has been very low.

Therefore, the House Budget Commission supports the government’s buying back of Indosat shares.

This support was included in the conclusion of a hearing between the House Budget Commission and Indosat at the Parliament Complex, on Tuesday (31/1).

Drajad Wibowo, a member of the Budget Commission, said that dominant foreign ownership in the telecommunication industry was regarded as a dangerous issue from a national security point of view.

“Secret communication between Indonesia’s officials can be monitored by Singapore,” said Drajad in Jakarta, on Tuesday.

According to him, STT Telecom’s dominant ownership of Indosat’s shares has caused this subsidiary of Temasek Holding that belongs to the Singaporean government to control 80 percent of the national communication flow.

Drajad said that Temasek made Indosat’s shares price always high on purpose with a price cartel between STT Telecom at Indosat and Singtel at Telkomsel.

As a result, he said Temasek’s existence is very dominant in the national telecommunication industry.

As previously reported, the government sold 41.94 percent of its Indosat shares in January, 2002, and the sale was won by STT Telecom, Temasek Holding’s subsidiary.

So now the government only owns 14.96 percent of Indosat shares with the other remaining shares being owned by members the general public.

Eko Nopiansyah