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tate-Owned Enterprises Minister Dahlan Iskan said state-owned telecommunication company PT Telkom'€™s decision to sell its TV subsidiary to one of Indonesia'€™s richest men, Chairul Tanjung, was based purely on business rationale.

He denied any questionable motives behind the planned acquisition of PT Indonusa Telemedia, commonly known as TelkomVision, by the politically connected businessman.

Dahlan said the acquisition was conducted through a transparent tender process to ensure only the largest bid won the deal. He also denied the tycoon won because he was close to President Susilo Bambang Yudhoyono.

'€œChairul Tanjung was the best bidder,'€ he told The Jakarta Post in a text message on Tuesday.

Chairul recently signed a conditional sale and purchase agreement to acquire 80 percent stake in the TV cable operator.

No details about the transaction have been released but sources told Reuters that the deal could be worth less than US$100 million.

Analysts blasted Telkom'€™s decision to sell its TV cable subsidiary as the wrong move given the potential of the cable TV market.

The penetration rate of TV cable in Indonesia is only seven percent at present; far lower than in other emerging countires such as India (80 percent) and China (about 50 percent).

According to Telkom'€™s latest financial report, TelkomVision'€™s total assets were Rp 755 billion ($77 million) in the first quarter of the year.

The subsidiary also reaped Rp 94 billion in revenues in January-March 2013, just shy of 6 percent more than Rp 89 billion during the same period last year.

It lagged behind the market leader Indovision, which through its three brands reaped Rp 696 billion in revenues in the corresponding period in 2013; an increase of 30 percent.

'€œIn addition to that, Telkom does not have the capacity to provide sufficient content. Thus, the subsidiary has suffered losses over the 16 years since it was established,'€ Dahlan said.

Among the pay-TV providers operating in the archipelago, the market leader is Indovision, owned by MNC Sky Vision, which is controlled by Harry Tanoesoedibjo. Second place was TelkomVision, which has 80 local and international channels.

As of today, the TelkomVision has more than 2 million subscribers.

In the last announcement submitted to the Indonesia Stock Exchange (IDX), Chairul said that Telkom would act as infrastructure provider and CT Corpora as content provider.

Despite its losses the pay-TV operator has beaten other subscription-based television services to win the Best Call Center Award 2013 organized by Service Excellence Magazine and the Care Center for Customer Satisfaction& Loyalty (CCSL).