Telkom to raise $756 million loan for expansion

The Jakarta Post, Wed, 11/26/2008 1:34 AM  

PT Telekomunikasi Indonesia (Telkom) plans to borrow Rp 9 trillion ($756 million) from local banks to help fund expansion next year and fend off rivals. 

"We want to keep growing during the crisis", Telkom President Director Rinaldi Firmansyah told reporters in Jakarta on Tuesday. The company needed to boost spending to maintain market share, he said. 

Telkom, Indonesia's biggest company by market value and Southeast Asia's second-largest phone company, may seek loans from banks including PT Bank Mandiri, PT Bank Negara Indonesia (BNI)  and PT Bank Rakyat Indonesia (BRI) to cover as much as 40 percent of its spending plan totaling 22.5 trillion rupiah, Rinaldi said. 

According to Bloomberg, the company is spending about 13.5 trillion rupiah to expand its wireless unit PT Telekomunikasi Selular after posting its lowest quarterly profit in two years amid the global financial crisis. 

Its net income fell 18 percent between July and September this year due to intensifying competition and reduced tariffs from rivals including Saudi Telecom Co. and Li Ka-shing's Hutchison Telecommunications International Ltd. 

Rinaldi said the company was considering expanding into Iran, which they consider a good potential market as growth slows at home.