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Telekom Malaysia Berhad ("TM") is pleased to announce that on 20 March 2003, TM and Perusahaan Perseroan P.T. Telekomunikasi Indonesia ("PT") have entered into Memorandums of Understanding ("MOU") for the provision of:

1. Telecommunication Services; and
2. Planning and Development of Dumai - Melaka Cable System ("DMCS").

Information About PT

PT, a majority state-owned company, is the principal provider of telecommunications services in Indonesia. It provides both local and domestic long distance telephone services and through its subsidiary, Telkomsel, provides mobile cellular telecommunications services. PT also provides other telecommunication services such as multimedia, internet and data communications related services including dial-up internet access, dedicated high speed internet access, virtual private network services and global network services accessible from more than 175 countries.

Currently, PT owns an International License for the VoIP Services and is targeted to receive a full international license to provide IDD by early 2003.

Scope of Cooperation

The scope of cooperation in telecommunication services shall cover the following areas:

a) Optical Submarine Cable Development;
b) International Traffic Exchange;
c) Multimedia and Internet Services;
d) Call Center; and
e) Human Resource Development.

In addition thereto, TM and PT shall collaborate for the implementation of a new high capacity fiber optic submarine cable system known as the "Dumai - Melaka Cable System" to support the tremendous growth and demand in the telecommunication traffic between Indonesia and Malaysia.

Rationale of the MOUs

TM foresees that the cooperation marks the beginning of a promising business relationship and opportunities between the two companies. Through the MOUs, TM would provide international reach to PT and become its global hub by tapping on the large traffic volume carried by PT to Malaysia and other destinations.

The MoUs would also facilitate both parties to share and transfer their respective knowledge in the telecommunication business.

Directors' and Substantial Shareholders' Interest

In so far as the Directors of TM are aware, none of the Directors nor the major shareholders of TM and/or persons connected to them have any interest, whether direct or indirect, in the abovesaid transaction.