The Indonesian government yesterday threw its weight behind state-backed PT Telkom’s plan to merge its CDMA operations with private operator Bakrie Telecom. The Jakarta Post quotes the Enterprises Minister Mustafa Abubakar who confirmed that ‘Telkom has submitted a formal letter to the ministry asking the government’s approval of the plan.’ At this stage it is unclear what exact alliance the pair envisage, but the minister said that the government would support the plan ‘as long as it benefits’ the state company.
Last week CommsUpdate reported that Telkom was in talks with fellow mobile phone operator Bakrie Telecom on the possible consolidation of their CDMA operations in the country. The news comes in the wake of Bakrie Telecom posting a sharp rise in profits in the first quarter of this year. Bakrie said its net profit leapt to IDR29.05 billion in the first three months of 2010 from IDR5.73 billion a year earlier due to foreign exchange gains and lower operating costs. Operating costs for the period fell to IDR585.22 billion from IDR605.12 billion a year earlier, it said while it booked IDR28.21 billion in foreign exchange gains, up from IDR14.19 billion in the previous year. Bakrie Telecom, which had 10.6 million customers at the end of 2009, expects to boost its base by around 32% to 14 million by end-2010.