(JAKARTA) State-owned PT Telkom, Indonesia's largest telecommunications company, announced on Wednesday it had jointly set up a new business venture with the central bank to provide financial network services to the banking industry, reports The Jakarta Post.
Telkom said in a statement that the new firm, named PT Finnet Telkom, was 60 per cent owned by the company through its subsidiary, PT Multimedia Nusantara, while the remaining 40 per cent was owned by Bank Indonesia through its affiliate, PT Mekar Prana Indah.
The paper says the two companies have injected around 10 billion rupiah (S$1.7 million) as start-up capital into the new firm.
Telkom said Finnet was being set up to avail of prospects in the financial data and banking network businesses, which are currently dominated by PT Aplikanusa Lintasarta - a subsidiary of Telkom's smaller rival, PT Indosat.
The government had earlier urged Telkom to form a new company to reduce what it claimed was the risk of 'banking espionage' on the part of certain shareholders of Indosat.
Said Didu, the secretary to the state minister for state enterprises, said that among the options for reducing the purported risk would be for Telkom to compete head-to-head with Indosat.
Lintasarta, which is 69.46 per cent owned by Indosat, provides high-speed data communications and corporate network services, and pioneered the development of the electronic banking transfer system in Indonesia.
The Business News, Singapore
February 3, 2006