T

he country's largest telcom operator PT Telekomunikasi Indonesia (Telkom) may acquire smaller local telcom firms, including Bakrie Telecom, next year to expand its code division multiple access (CDMA) services.

Telkom finance director Sudiro Asno said Wednesday his firm was targeting companies outside its main competitors, PT Indosat and PT Excelcomindo Pratama, respectively the country's second and third largest telco operator.

Telkom, he said, "Is only targeting *smaller guys'." Sudiro did not elaborate but quickly added that "It hasn't been decided yet. We are still in an early stage."

Sudiro said that should the deal with Bakrie Telecom be reached, then Telkom may issue bonds next year to help finance the acquisition.

However, when The Jakarta Post mentioned the matter to Bakrie Telecom, the management said that they knew nothing about it.

"We have not had any talks whatsoever either with Telkom or with in our internal management," Bakrie Telecom director for development Rakhmat Junaidi said over the phone.

He continued that the company was now focusing on developing the company's business and did not have any plan to sell its shares to other parties.

Bakrie Telecom, famous for its Esia budget telecom services, had 7.3 million subscribers in 2008.

The number jumped to 8 million in the first quarter of this year.

Telkom plans to spend US$2 billion in capital expenditure (capex) next year to expand its business.

The capex financial sources would come from internal cash (60 percent) and the rest from loans (40 percent) Sudiro said.

Telkom is making efforts to maintain its position as the number one company in the industry.

However, Telkom's current market share in the telecommunications and information industry is currently below 50 percent.

Sudiro said the company therefore targeted up to an additional 12 million subscribers next year,

Sudiro added that 70 percent of the capital expenditure was due to be allocated to Telkomsel, Telkom's cellular business subsidiary and also the company's biggest contributor to overall revenue.

On next year's outlook, Sudiro said he predicted "high single digit growth" for Telkomsel and "low single digit growth" for Telkom.