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tate-run telecommunications firm PT Telekomunikasi Indonesia (Telkom) has decided to cancel a plan to swap its stakes in its tower subsidiary PT Dayamitra Telekomunikasi (Mitratel) for stakes in tower operator PT Tower Bersama Infrastructure, a minister has said.

State-Owned Enterprises Minister Rini Soemarno confirmed on Tuesday that Telkom'€™s boards of directors and commissioners had agreed to cancel the share-swap agreement with Tower Bersama.

'€œI'€™ve been handed a verbal report from Telkom'€™s commissioners that they'€™ve met with the firm'€™s directors and agreed to cancel the Mitratel deal,'€ Rini said after a hearing with the House of Representatives'€™ Commission VI overseeing state-owned enterprises.

Rini also denied rumors that her ministry had forced the cancellation, claiming that the share swap was a full corporate action that did not require her approval but that of the company'€™s commissioners.

As the responsible minister, Rini represents the government'€™s 53.14 stake in Telkom.

Telkom and Tower Bersama signed a conditional share exchange agreement (CSEA) in October last year, under which Telkom was to initially exchange its 49 percent stake in Mitratel for 5.7 percent of Tower Bersama'€™s enlarged share capital.

Upon the completion of the initial exchange, Telkom was to be granted an option to exchange its remaining 51 percent stake in Mitratel for 8 percent of shares in Tower Bersama.

The state-run company would also have received cash of up to Rp 1.73 trillion (US$129.4 million) from Tower Bersama in the event that Mitratel reached certain milestones. The additional cash would have enabled Telkom to increase its stake in Tower Bersama to about 15 percent.

Telkom president director Alex Sinaga said previously that the CSEA '€” scheduled for Jun. 30 '€” was subject to approval from his company'€™s commissioners, with the possibility of a due-date extension with the agreement of Tower Bersama.

Rini said, however, that the cancellation of the planned transaction was final, based on a report from Telkom'€™s commissioners.

Neither Telkom and Tower Bersama were available for comment on Tuesday regarding the cancellation of the share-swap agreement.

Commission VI deputy chairman Azzam Azman Natawijaya said recently that the House was questioning Telkom'€™s planned share-swap agreement given that the firm in fact had the largest number of towers in the industry.

Telkom'€™s Alex explained during a recent hearing with the commission that the planned share swap was not aimed at selling the firm'€™s assets, but at maintaining the value of its towers amid hypercompetition in the tower industry, adding that the firm was, furthermore, looking to focus on its core ICT business.

Telkom has a total of 23,000 towers, surpassing that of the largest independent tower company PT Protelindo (a subsidiary of PT Sarana Menara Nusantara), which has 11,595.

Telkom'€™s total consists of 18,000 Telkomsel towers and 5,000 Mitratel towers.

Alex revealed, meanwhile, that the transaction value with Tower Bersama, if materialized, was estimated to be at a premium price of Rp 2.4 to Rp 2.8 billion per tower.