"A merger (between the two firms) is definitely not discussed in the blueprint," Giri Suseno, minister of communications was quoted as saying by The Jakarta Post newspaper.

"The blueprint clearly regulates that Telkom and Indosat will exist as separate entities until 2011," he added.

Over the weekend, Indonesia's PT Telkommunikasi Indonesia (Telkom) had indicated its interest in a merger with satellite operator PT Indosat to survive competition.

Telkom's operational director John Welly said the merger of the two telecommunications operators in Indonesia would boost their strength and enable them to compete with foreign telecom giants.

"As an individual entity, we are too small for those foreign operators. We should join forces so that we can compete head-to-head with them," Welly said.

Telkom holds exclusive rights to provide local fixed line and fixed wireless telecommunications services nationwide until 2010 and domestic long distance services until 2005.

Indosat and its joint venture Satelit Palapa Indonesia (Satelindo) hold exclusive rights for overseas long distance services until 2004.

Suseno said Telkom and Indosat could become more competitive and efficient without a merger.

"Let them exist as they are now. We're are going to assist Telkom to expand to the international services and Indosat to tee off in the local fixed line network, so that both will have equivalent products and services to compete in the future with each other or foreign players," he said.

Suseno also said that merging of the two operators, each with different business plans and working cultures, would consume to much time and energy.

"It is not an effective strategy and surely would not generate an effective result," he added.

Copyright 1999 AFP. All rights reserved.

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