Indonesia sets limit on telco foreign ownership

Indonesia has set limits on the foreign ownership of companies in several sectors it says are key to national security, including cellular and fixed line telecommunications firms, the country's trade minister, quoted by an Associated Press, said.

The regulations would not apply to foreign investments that are already in place or are being processed, Mari Elka Pangestu was quoted by the Associated Press report as saying. 'The new regulation isn't retroactive.'

Foreign ownership of cellular companies will be limited to 65% and to 49% of fixed line operators, Pangestu told a news conference, the report said.

The new rules apply mainly to telecommunications companies that would be formed in the future, she said.

Pangestu said the government would not allow any increase in foreign ownership in existing cellular and fixed line telephone operators if it's already above the new limits.

At least two local cellular companies currently have foreign ownership exceeding 65%. Telekom Malaysia owns 66.98% of PT Exelcomindo Pratama while Malaysia's Maxis Communications owns 95% of PT Natrindo Telepon Selular, the report said.

Indonesia previously had no clear limits on foreign ownership levels in the telecommunications sector, it added.
A regulation issued in 2000 stated that foreign investors could own a maximum 49% in a telecommunications company, but did not specify whether that applied to both mobile and fixed line businesses.

Pangestu said foreigners could own up to 20% of a local media company if they buy the shares through the stock market, the report said.