A long-running saga involving the ownership of Indosat, Indonesia’s second-largest mobile operator, has taken another twist this week with news that the Indonesian government has allowed Qatar Telecom (Qtel) to buy up to 65 percent of the company. In what the Financial Times (FT) described as “a significant policy U-turn,” Sri Mulyani Indrawati, Indonesia’s chief economics minister, declined to explain her decision to lift a previous cap of 49 percent on foreign ownership of the firm. Qtel told the FT that it was still awaiting details on the decision but was “cautiously very pleased.” However, it declined to give a figure on the size of its preferred final stake.

Qtel announced in June it was to pay US$1.8 billion to buy a 40.8 percent stake in Indosat owned by Asia Mobile Holdings, a joint-venture between Qtel and ST Telemedia (STT). However, the deal sparked controversy as STT is controlled by Singapore-based sovereign wealth fund Temasek, which had been ordered to divest one of its stakes in the two leading Indonesian operators, but was selling to Qtel, its partner in Asia Mobile Holdings. According to the FT, the restrictions on who STT could sell to was lifted last month in a Supreme Court ruling, but the court also imposed a 49 percent cap on Qtel’s stake. The 49 percent cap on foreign ownership in Indonesia is usually applied to fixed-line operators rather than mobile operators.