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tate-run telecommunications company PT Telekomunikasi Indonesia (Telkom) is planning a joint venture with Singapore Telecommunications Ltd. (Singtel) to work on information and technology (IT) applications for the city state'€™s market.

Indra Utoyo, Telkom innovation and strategic portfolio director, said his company, through its subsidiary PT Sigma Cipta Caraka (telkomsigma), would form a joint venture with SingTel'€™s subsidiary National Computer Systems Pte. Ltd. (NCS) to operate as an application provider.

'€œWe'€™re still in a discussion with Singtel for details of the joint venture. ['€¦] We'€™ll certainly aim for a majority stake in the new firm,'€ he said over the weekend.

Indra added that one option would be 60 percent for Telkom and 40 percent for Singtel. He declined, however, to disclose any specific amount of investment for the joint venture, saying it would not be an investment heavy company as it would mainly use existing IT infrastructure owned by telkomsigma.

The joint venture will focus on providing IT systems in the transportation, health and education sectors.

The new firm will combine telkomsigma'€™s strong IT services and data center business in the country and NCS'€™s expertise in communications engineering solutions.

Telkomsigma currently operates three data centers located in Serpong in Banten, Surabaya in East Java and Sentul, West Java, with total space of around 12,300 square meters.

NCS, meanwhile, is ranked first in professional services for the Singapore market and was among 12 top vendors in the Asia Pacific market (excluding Japan) in 2007, according to Gartner Dataquest.

Telkom, Indra said, aimed to launch the planned joint venture at the end of this year, with telkomsigma partnering with NCS under a business-to-business (B2B) scheme in the meantime.

The joint venture was part of Telkom'€™s strategy to capture untapped potential in the enterprise market, he went on.

Besides expanding its business in the country, Telkom is heavily investing in expansion outside Indonesia to add to its global reach.

The firm had set aside about 20 percent of its Rp 7 trillion (US$525.4 million)-bonds for strategic mergers and acquisitions to develop its mobile virtual network (MVN) business, Telkom finance director Heri Sunaryadi revealed.

Telkom, Indra said, was in the process of acquiring Pacific Island'€™s GTA Teleguam with total investment of around US$240 million.

At present, Telkom globally operates in Singapore, Hong Kong, Australia, Taiwan, the US, Malaysia, Macau, Timor Leste, Saudi Arabia and Myanmar.

Telkom, 'ۥthrough its wholly owned subsidiary Telin Singapore, has recently started the construction of its third data center in the city-state.

The US$115 million data center, named Telin-3, will serve both Singaporean corporations and global firms based in Singapore, brushing off speculation that it will host Indonesia'€™s confidential data.

Telkom'€™s Heri said that the payback period for Telin-3 would be seven years, with internal rates of return hitting 18 percent.

Telkom'€™s shares, which are traded on the indonesia Stock Exchange (IDX) as TLKM, shot up by 0.35 percent to Rp 2,890 apiece at Friday'€™s close from Rp 2,880 per piece in the previous closing.