Annual Report Telkom Indonesia 2000

2000 Annual Report
on Form 20-F
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Ñscal year ended December 31, 2000 Commission Ñle number 1-13330
Perusahaan Perseroan (Persero)

P.T. Telekomunikasi Indonesia Tbk.
(Exact name of Registrant as speciÑed in its charter)
Telecommunications Indonesia
(a state-owned public limited liability company)
(Translation of Registrant's name into English)
Republic of Indonesia
(State or other jurisdiction of incorporation or organization)
Jalan Japati, 1
Bandung 40133
Indonesia
(62) (22) 452-7337*
(Address and telephone number of Registrant's principal executive oÇces)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of Name of each exchange

Each class on which registered
American Depositary Shares representing Series B Shares, par Value 500 Rupiah
per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ New York Stock Exchange
Series B Shares, par value 500 Rupiah per shareÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ New York Stock Exchange**
Securities registered or to be registered pursuant to Section 12(g) of the Act.

None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the
close of the period covered by the annual report:
Series A Shares, par value 500 Rupiah per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1

Series B Shares, par value 500 Rupiah per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,079,999,639
Indicate by check mark whether the registrant (1) has Ñled all reports required to be Ñled by Section 13 or
15(d) or the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to Ñle such reports), and (2) has been subject to such Ñling requirements for the past
90 days.
Yes X No
Indicate by check mark which Ñnancial statement item the Registrant has elected to follow.
Item 17 Item 18 X
* Investor Relations Unit

** The Series B Shares were registered in connection with the registration of the American Depositary Shares. The
Series B Shares are not listed for trading on the New York Stock Exchange.
TABLE OF CONTENTS
Page
DEFINITIONS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1
Introduction ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4
PART I
Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS* ÏÏÏÏÏÏÏÏ 5

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE* ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5
Item 3. KEY INFORMATIONÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5
Item 4. INFORMATION ON THE COMPANY ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9
Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 36
Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEESÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 45
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS ÏÏÏÏÏÏÏÏÏÏÏÏ 50
Item 8. FINANCIAL INFORMATION ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 51
Item 9. THE OFFER AND LISTINGÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 52
Item 10. ADDITIONAL INFORMATION ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 55
Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK ÏÏÏÏÏ 64
Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES*ÏÏÏÏÏÏÏÏÏÏÏ 70
PART II
Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 70

Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 70
Item 15. RESERVEDÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 70
Item 16. RESERVEDÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 70
PART III
Item 17. FINANCIAL STATEMENTS* ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 70

Item 18. FINANCIAL STATEMENTS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 70
Item 19. EXHIBITS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 71
* Omitted because item is not applicable.
i
DEFINITIONS
""AMPS'' (Advanced Mobile Phone System) is a form of analog mobile cellular.
""ASR'' (Answer to Seizure Ratio), see ""Call Completion Rate.''
""ATM'' (Asynchronous Transfer Mode) is a transfer mode in which the information is organized
into cells. It is asynchronous in the sense that the recurrence of cells containing information from an
individual user is not necessarily periodic.
""B2B'' (Business-to Business Electronic Commerce) is a technology-enabled application environ-
ment to facilitate the exchange of business information and automate commercial transaction designed
to automate and optimize interactions between business partners.
""backbone'' means the secondary and tertiary exchanges and the transmission links between and
among them. Transmission media may consist of microwave, submarine cable, satellite, optical Ñbre or
other technologies.
""call completion rate,'' means the percentage of calls that are successfully completed, as measured
by the number of calls successfully answered divided by the number of call attempts that are
recognized by the caller's local exchange, in the case of call completion rates for local calls, and call
attempts that are recognized by the trunk exchange, in the case of call completion rates for long
distance calls. Call completion rate is measured by the answer to seizure ratio (""ASR'').
""capacity utilization'' means the ratio of lines in service to local exchange capacity.
""DCS 1800'' (Digital Communication System) is a mobile cellular system using GSM technology
operating in 1800Mhz frequency.
""distribution point'' means the point of interconnection between the drop wire and the secondary
cable running to a cabinet and/or a local exchange.
""drop wire'' means the wire connecting the subscriber's premises to the distribution point.
""DTR'' (Distributable TELKOM Revenues) is the monthly revenue share payment to be made by
each KSO Unit to TELKOM, being a speciÑed percentage of telephone and other revenues of a KSO
Unit (after deduction of MTR and speciÑed cash expenses) from operating all lines in service in each
KSO Divisions.
""earth station'' means the antenna and associated equipments used to receive or transmit
telecommunication signals via satellite.
""existing installations'' means telecommunications facilities, including telephone lines, network
infrastructures and related assets in existence in each KSO Division as of the beginning of each KSO
Period plus certain facilities and equipments constructed or installed by TELKOM in the KSO Divisions
after such dates which handed over to be managed by KSO Investors.
""Ñxed cellular'' is a form of Ñxed wireless technology, which uses conventional cellular network
conÑgurations to link a subscriber at a Ñxed location to a local exchange.
""Ñxed wire line'' is a Ñxed path (wire or cable) linking a subscriber at a Ñxed location to a local
exchange, usually with an individual phone number.
""Ñxed wireless'' is a wireless, local transmission link using cellular, microwave or radio technology
to link a subscriber at a Ñxed location to a local exchange.
""Government'' means the Government of the Republic of Indonesia.
""GPRS'' (General Packet Radio Service) is a new GSM technology platform, which is also called
the two-and-half Generation (2.5G), that enables mobile-multimedia services over the GSM network.
The services supported by GPRS platform may range from voice services, data transfer (up to
115Kbps), intranet, internet, mobile-commerce, to information services under WAP applications.
1
""GSM'' (Global System for Mobile Telecommunication) is a European standard for digital cellular
telephone.
""HFC'' (High Fibre Coaxial) is a way of delivering video, voice telephony, data, and other
interactive services over coaxial and Ñbre optic cables.
""installed lines'' is lines fully built-out to the distribution point and ready to be connected to
subscribers.
""ISDN'' (Integrated Services Digital Network) is development of system with narrow bandwidth
and digital system from end to end (terminal to terminal) that allows simultaneous transmission of
voice, data and video with high speed, high capacity and high quality.
""KSO'' (Kerjasama Operasi) or Joint Operation Scheme, is a unique type of build, operate, and
transfer arrangement consists of Ñve KSO Divisions known as KSO Unit i.e.: TELKOM's Regional
Divisions I (Sumatera), III (West Java), IV (Central Java), VI (Kalimantan) and VII (Eastern
Indonesia).
""KSO Investor'' means each of the Ñve private joint venture companies, which currently is a party
to a KSO Agreement with TELKOM.
""KSO Period'' means the period commencing as under each KSO Agreement and ending on
December 31, 2010.
""leased line'' means a dedicated telecommunications transmissions line linking one Ñxed point to
another, rented from an operator for exclusive use.
""lines in service'' means revenue-generating lines connected to subscribers, including payphones,
but does not include mobile cellular subscribers or lines used internally by TELKOM.
""local exchange capacity'' means the aggregate number of lines at a local exchange connected and
available for connection to outside plant.
""Mbps'' (megabits per second) is a measurement of speed for digital signal transmission expressed
in millions of bits per second.
""microwave transmission'' means transmission consisting of electromagnetic waves in the radio
frequency spectrum above 890 million cycles per second and below 20 billion cycles per second.
""MTR'' (Minimum TELKOM Revenues) refers to a guaranteed annual minimum amount of
revenue, paid in monthly instalments, by KSO Units to TELKOM.
""NMT-450'' (Nordic Mobile Telephone) is a form of analog mobile cellular service primarily
installed in vehicles.
""Non-KSO Divisions'' means Regional Divisions II (Jakarta) and V (East Java) and the Network
Services and Corporate Head OÇce Divisions of TELKOM.
""non-PBH lines'' means lines not subject to PBH arrangements.
""optical Ñbre cable'' means cables using optical Ñbre and laser technology, whereby modulating
light beams representing data are transmitted through thin Ñlaments of glass.
""outside plant'' is the equipment and facilities used to connect subscriber premises to the local
exchange.
""overlay'' means a separate network, which operates independently of the existing telephone
network, but covers the same geographic region.
""PBH'' (Pola Bagi Hasil) is a type of Build, Operate and Transfer arrangement, refers to a form of
revenue sharing arrangement under which a private investor Ñnances construction of a system,
TELKOM is responsible for operation and maintenance.
2
""PBH lines'' are lines Ñnanced, constructed and operated pursuant to PBH revenue sharing
arrangements.
""PBX'' (Private Branch Exchange) is a small private open architecture telephone network.
""PSDN'' (Packet Switched Data Network) is a network using a switch device and sending packets
of data through the network to some remote locations.
""PSTN'' (Public Switched Telephone Network) is a network operated and maintained by
TELKOM and the KSO Units for and on behalf of TELKOM.
""RIP'' (Rencana Induk Pembangunan) is TELKOM's Ñve-year development plan.
""satellite transponder'' means the radio relay equipment on a satellite, which receives a signal,
ampliÑes it, changes its frequency, and then sends it back to earth.
""switch'' means a mechanical, electrical or electronic device, which opens or closes circuits,
completes or breaks an electrical path, or selects paths or circuits used to route traÇc on the PSTN.
""switching capacity'' means the capacity of all Network exchanges to switch a circuit from one
exchange to another.
""SOPP'' (System On-Line Payment Point) is payment point service, which allows TELKOM
customers to pay their bills electronically through certain on-line and integrated banks or post oÇce.
""trunk exchange'' means a primary, secondary or tertiary exchange.
""USO'' or ""Universal Service Obligation'' is the service obligation imposed by the Government on
all providers of telecommunications services for the purpose of providing public service in Indonesia.
""VoIP'' (Voice over Internet Protocol) also referred to as ""Internet Telephony'' is a two-way
transmission of audio over an IP network, such as the internet.
""VSAT'' (Very Small Aperture Terminal) is a relatively small antenna, typically 1.5 to 3.0 meters
in diameter, used for transmitting and receiving one channel of data communication.
""WAP'' (Wireless Application Protocol) is an open and global standard of technology platform
that enables mobile users to access and interact with mobile information services such as email, Web
sites, Ñnancial info, on line-banking, information and entertainment (infotainment), games, micro
payments, etc.
""WLL'' (wireless local loop) is the use of wireless technology (such as cellular or microwave) as
part of a network's outside plant.
3
Introduction
In this Annual Report certain Rupiah amounts have been translated into Dollars at speciÑed rates.
For 1996 to 1998, Dollar equivalent information for amounts in Rupiah is based on the exchange rates
quoted by Bank Indonesia in its weekly reports. For 1999, TELKOM quotes middle exchange rate from
Dow Jones Telerate, while for 2000, TELKOM quotes exchange rates from the Bridge Telerate, which on
December 31, 2000, was Rp 9,625 • US$1.00. The Federal Reserve Bank of New York does not certify
for customs purposes a noon buying rate for cable transfers in Rupiah. No representation is made that
the Rupiah or Dollar amounts shown herein could have been or could be converted into Dollars or
Rupiah, as the case may be, at any particular rate or at all.
The following table sets forth certain exchange rate information expressed in terms of the
Indonesian Rupiah for Dollars.
At End
of Average
Year Ended December 31, Period High Low Rate
(Rupiah per U.S.$1.00)
1996(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,383 2,383 2,311 2,347
(1) Source: Bank Indonesia.

(2) Source: Dow Jones Telerate
(3) Source: Bridge Telerate
Forward Looking Statement

This document contains certain forward looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the ""Securities Act''), and Section 21E of the Securities
Exchange Act of 1934, as amended (the ""Exchange Act''), with respect to the Ñnancial condition, result
of operations and business of the Company and certain plans and objectives of TELKOM with respect
to these items. In particular among other statements, certain statements in ""Item 5 Operating and
Financial Review and Prospects'' including, without limitation, those concerning the Company's
expectations and plans, strategy, management's objectives, trends in market shares, market standing,
overall market trends, risk management, exchange rates and revenues and general and administration
expenses, and forward looking statements concerning TELKOM's operations, performance and Ñnan-
cial condition. Such statements can be generally identiÑed by the use of terms such as ""believes,''
""expects,'' ""may,'' ""will,'' ""would,'' ""could,'' ""plans,'' or ""anticipates,'' and the negatives of such terms
or comparable terms. By their nature, forward looking statements involve risks and uncertainties
because they are related to events, which depend on circumstances that will occur in the future. There
are a number of factors that could cause actual results and developments to diÅer materially from those
expressed or implied by these forward looking statements. These factors include, but are not limited to,
changes in demand for the Company's products and services, the impact of competitive products and
services and pricing of the Company's products and services, impact of regulation, future exchange and
interest rates, changes in tax rates and future business combinations or dispositions.
4
PART I
Item 1: Identity of Directors, Senior Management and Advisers
Not applicable.
Item 2: OÅer Statistics and Expected Timetable
Not applicable.
Item 3: Key Information
A. Selected Ñnancial data
The following table presents selected Ñnancial information and operating statistics of the Company
for and as of the end of each of the periods indicated. This information should be read in conjunction
with, and is qualiÑed in its entirety by reference to, the Company's Consolidated Financial Statements,
including the notes thereto, and the other information included elsewhere herein. The Company's
Consolidated Financial Statements for the years 1998 and 1999, were audited by Prasetio, Utomo & Co.,
the member Ñrm of Arthur Andersen & Co. SC in Indonesia. The Company's Consolidated Financial
Statements for the year 2000 has been audited by Hans Tuanakotta & Mustofa, a member Ñrm of
Deloitte Touche Tohmatsu in Indonesia as indicated in their report appearing on page F-1 herein. Such
Financial Statements are prepared in accordance with Indonesian GAAP, which diÅers in certain
signiÑcant respects from U.S. GAAP. See ""Quantitative and Qualitative Disclosure About Risk Ì
Summary of Material DiÅerences between Indonesian GAAP and U.S. GAAP'' and Notes 43 and 44 to
the Company's Consolidated Financial Statements, which provide a description of the material
diÅerences between Indonesian GAAP and U.S. GAAP and a reconciliation to the approximate amount
of U.S. GAAP net income and stockholders' equity of the Company for and as of the end of each of the
periods indicated in the Consolidated Financial Statements.
1996 1997 1998 1999 2000
Rp Rp Rp Rp Rp
(Rp in billion, except share and ADS data)
Income Statement Data
Indonesian GAAP
Operating revenues
Telephone
Local and domestic long distance usage ÏÏÏÏ 1,953 2,375 2,903 3,571 4,097
Monthly subscription charges ÏÏÏÏÏÏÏÏÏÏÏÏÏ 425 543 683 799 887
Installation charges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 242 156 106 68 75
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 122 132 113 91 118
Total telephone revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,743 3,206 3,805 4,529 5,178
Revenue Under Joint Operation SchemeÏÏÏÏÏÏ 1,498 1,646 1,592 1,677 2,267
Interconnection ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 310 573 556 892 1,121
Other telecommunication services
Revenue sharing ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 344 272 285 308 308
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 181 212 362 384 502
Total operating revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,076 5,909 6,600 7,790 9,375
5
1996 1997 1998 1999 2000
Rp Rp Rp Rp Rp
(Rp in billion, except share and ADS data)
Operating expenses
Personnel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 787 847 832 1,106 1,439
Depreciation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,402 1,697 2,162 2,364 2,088
Operation, maintenance and
telecommunications services(1) ÏÏÏÏÏÏÏÏÏÏÏÏ 444 412 501 822 1,009
General and administrative ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 267 392 474 508 715
MarketingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29 35 31 47 87
Total operating expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,927 3,383 4,000 4,847 5,338
Operating incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,149 2,526 2,600 2,943 4,037
Other expenses (income)
Interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 452 523 981 1,487 817
Interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (231) (145) (595) (688) (632)
Loss (gain) on foreign exchange Ì netÏÏÏÏÏÏÏ 3 424 966 (280) 1,064
Others Ì net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (146) 102 (177) (538) (670)
Income before provision for income tax ÏÏÏÏÏÏÏÏ 2,071 1,622 1,425 2,962 3,458
Provision for income taxÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 568 470 256 777 906
Minority interest in net income of subsidiary ÏÏÏ Ì Ì Ì 13 13
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,503 1,152 1,169 2,172 2,539
Weighted average shares outstanding (millions) ÏÏ 9,333 9,333 9,333 9,644 10,080
Net income per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 161.07 123.44 125.21 225.24 251.89
Net income per ADS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,221.31 2,468.79 2,504.29 4,504.89 5,037.72
Dividend declared per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24.48 41.25 48.48 50.99 107.76
U.S. GAAP(2)
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,356 811 924 2,385 2,497
Net income per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 145.28 86.87 99.01 247.33 247.74
Net income per ADS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,905.64 1,737.32 1,980.21 4,946.62 4,954.73
As of December 31,
1996 1997 1998 1999 2000
Rp Rp Rp Rp Rp
(Rp in billions, U.S.$ in millions)
Balance Sheet Data
Indonesian GAAP
Total assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,669 19,819 23,693 26,330 28,880
Current liabilities(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,129 2,370 2,615 3,393 3,390
Other liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,249 2,174 2,133 2,142 2,220
Long term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,424 5,637 8,437 8,541 9,546
Total liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,802 10,181 13,185 14,076 15,156
Total stockholders' equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,867 9,638 10,508 12,224 13,688
U.S. GAAP(3)
Total assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,652 19,472 23,069 25,771 28,216
Total stockholders' equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,496 8,948 9,675 11,605 13,026
(1) Beginning in the third quarter of 1998, management reclassiÑed commissions paid on wartels, and kiosks, as Operation,
Maintenance and Telecommunications Services expenses (rather than marketing expenses).
(2) U.S. GAAP amounts reÖect adjustments resulting from diÅerences in the accounting treatment of pensions, foreign exchange
diÅerential on property under construction, equity in net income (loss) of investees, revaluation of property, plant and
equipment, PBHs and deferred stock issuance cost. See Note 43 to the Company's Consolidated Financial Statements.
(3) Includes current maturities of long-term debt.
6
As of and for the Year Ended December 31,
1996 1997 1998 1999 2000
Operating Statistics (unaudited)
Exchange capacity
Non-KSO Divisions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,586,750 4,035,245 4,324,024 4,449,552 4,515,615
KSO DivisionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,756,945 3,356,952 3,827,993 3,909,179 3,946,407
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,343,695 7,392,197 8,152,017 8,358,731 8,462,022
Lines in service(1)
Non-KSO Divisions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,302,745 2,746,028 3,014,824 3,256,992 3,610,363
KSO DivisionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,883,285 2,236,438 2,556,820 2,823,201 3,052,242
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,186,030 4,982,466 5,571,644 6,080,193 6,662,605
Lines in service per 100 inhabitants
Non-KSO Divisions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.91 4.58 4.95 5.3 5.7
KSO DivisionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1.35 1.58 1.78 1.9 2.0
Combined ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.11 2.47 2.73 2.9 3.1
Public telephones(2)
Non-KSO Divisions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 74,873 92,192 126,345 155,107 216,288
KSO DivisionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 59,669 74,532 90,306 114,135 129,019
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 134,542 166,724 216,651 269,242 345,307
Leased lines in service
Non-KSO Divisions(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,401 1,223 1,371 2,446 3,300
Pulse Subscriber Production(2)(millions)
Call completion rate (%)
Local
Non-KSO Divisions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 55.9 60.9 68.1 72.0 77.0
KSO DivisionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 58.7 60.2 68.1 70.1 71.4
Domestic long distance
Non-KSO Divisions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 52.5 56.6 62.1 64.0 69.3
KSO DivisionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 53.6 56.4 62.0 62.4 64.5
Total Employees
Lines in service per employee
Non-KSO Divisions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 123 145 157 171 191
KSO DivisionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 99 118 135 149 163
Combined ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 111 131 146 160 177
(1) Includes lines in service operated by TELKOM pursuant to PBHs as of December 31: (1996) 389,972 , (1997) 416,165,
(1998) 406,487, (1999) 405,643 and (2000) 409,818.
(2) Consists of pulses generated from local and domestic long distance calls, excluding calls made from payphones and mobile
cellular phones
(3) Excludes 16,876 leased line and 1,198 leased line operated by Network Division and Multimedia Division, respectively (data
as of December 2000).
7
B. Capitalization and indebtedness
Not applicable.
C. Reason for the oÅer and use of proceeds

Not applicable.
D. Risk Factors
Indonesian Economic, Political and related Considerations
All of the Company's operations are located in Indonesia. The Company and the market price and
liquidity of the ADSs and the shares of Common Stock may be aÅected by changes in Indonesian
governmental policy, taxation and other political, economic, diplomatic or social developments in or
aÅecting Indonesia which are not within the control of the Company.
In the early 1980's, the Government initiated deregulation and economic liberalization policies that
have stimulated economic growth through private enterprise and increased investments. The Company
has beneÑted from the implementation of these policies as they have resulted in signiÑcant increases in,
among other things, business activity and corporate and personal wealth, spurring increased demand
for telecommunications services and increased volume in telephone traÇc.
Although the Government has indicated that it presently intends to continue these policies, and
the Company does not anticipate policy changes, there can be no assurance to that eÅect or that a
change in the Government would not result in changes in policy or the broader economic environment.
Any such change could have a material adverse eÅect upon the Company's business.
Exchange Rate Risk

The holders of ADSs and the Company are subject to currency risk should the value of the rupiah
depreciate against the U.S. dollar and certain currencies. Fluctuations in the exchange rate between the
rupiah and the U.S. dollar may materially aÅect the dollar value of any amounts a holder of ADSs will
receive in respect of dividends, the dollar value of the proceeds a holder would receive upon the sale in
Indonesia of shares of Common Stock and the secondary market price of the ADSs. Furthermore, the
Company receives all of its revenues in rupiah, but must make signiÑcant expenditures in other
currencies, particularly U.S. dollars and Japanese yen, related to the purchase of equipment and the
repayment and servicing of foreign currency denominated indebtedness.
As of December 31, 2000, the Company had a total long-term debt of Rp 10,364.8 billion, which
includes an equivalent of Rp 6,037.1 billion drawn from credit facilities under which it would be subject
to foreign exchange risk.
Currently the Company maintains foreign currency Ì denominated current assets (such as bank
deposits) in suÇcient amounts to meet its anticipated foreign currency Ì denominated current
liabilities when they come due.
Notwithstanding its expectations, there can be no assurance that the Company will be able to
manage its currency exchange rate risk successfully in the future or that the Company will not be
adversely aÅected by its new exposure to currency exchange risk.
Long Term solutions of KSO Agreements

On October 20, 1995, TELKOM entered into long-term agreements with 5 (Ñve) KSO Investors
providing for the transfer of network development and operational responsibility to the KSO Investor
for Regional Divisions I, III, IV, VI, and VII. Due to the depreciation of the rupiah against foreign
currencies, particularly the US Dollar, in 1997 and thereafter, some of the KSO projects have lost their
economic viability.
8
Discussions between TELKOM and KSO Investors have arrived at Ñve alternative solutions:
(i) continue the KSO schemes in accordance with original agreements with certain modiÑcations in
construction provisions, (ii) to form joint venture companies with TELKOM; (iii) to form joint venture
company with Indosat, (iv) separation of assets of the KSO; and (v) termination of the KSO
agreement. The Company believes the KSO scheme is still valid, therefore favors to proceed under the
original agreements with certain modiÑcations. However the Company is still open to discuss any
alternative proposed by the KSO Investors provided a win-win solution is presented.
The alternative solutions being discussed in regard to the KSO problem may result in various
solutions among KSO partners subject to certain conditions. TELKOM's view of the continuation of the
KSO original contract with some amendments is the most suitable to the parties and has the minimum
impact on the Company's Ñnancial position and operations. Meanwhile termination of the KSO is
believed to have the most impact on the Company's Ñnancial position and operations as the Company
would require signiÑcant funding to buy the KSO assets. Given the intensive negotiation being
conducted, the Company cannot determine the solution of its KSO as well as its impact on the
Company's Ñnancial position. In case the Company needs some Ñnancing sources to resolve the KSO
problem, the Company will optimize the use of cash generated internally and may use the other
Ñnancing sources that will result in minimum weighted average cost of capital.
Regulatory Structure
TELKOM and its operations are subject to comprehensive governmental regulation and supervi-
sion. In Indonesia, the Government sets policy for the telecommunications sector pursuant to
applicable laws, which generally establish basic principles and leave considerable discretion to the
Government. The Government is also responsible for implementation and enforcement of applicable
laws and policies. Government policies deÑne, among other things, the terms of TELKOM's exclusivity,
applicable tariÅ policy and structure and Universal Service Obligation (USO). Policies applicable to
the Company and the regulatory environment in which it operates may change and such changes could
have a material adverse eÅect on the Company's operations and Ñnancial prospects.
TariÅ Policy
In Indonesia, any rebalancing of tariÅs to better reÖect the costs of providing such services may
only be implemented through the Government's approval. The Government has stated its intention to
gradually rebalance tariÅs to reÖect costs while, at the same time, retaining aÅordability. No assurance
can be given that reductions in tariÅs for services such as long distance will be oÅset by corresponding
increases in tariÅs for other services.
On October 23, 1995, the Government issued a decree No. KM-79/PR.301/MPPT-95 (""The Price
Cap TariÅ Decree'') which establishes a policy of using a price cap tariÅ formula to aid in determining
future tariÅ adjustments for certain classes of telecommunications services. In relation with the
depreciation of the rupiah, during the year 1998 and 1999, the Government decided to apply a Öat
increase to all tariÅ structure. There is no assurance for a consistent implementation of the Price Cap
Formula.
Item 4: Information on the Company

A. History and development of the company
Perusahaan Perseroan (Persero) P.T. Telekomunikasi Indonesia Tbk. (""TELKOM'' or
the ""Company'') is the principal provider of telecommunications services in Indonesia, providing local
and domestic long distance telephone services through 6.66 million lines in service as of December 31,
2000. TELKOM, either directly or indirectly through its aÇliates, provides a wide range of other
telecommunications services, including mobile and Ñxed cellular, data communications, leased lines
and certain value-added services. TELKOM, a majority state-owned company, is one of the largest
companies in Indonesia with total operating revenues of Rp 9,375.7 billion and Rp 2,539.0 billion of net
9
income in the year 2000. From 1996 to 2000, the Company's operating revenues and net income had
compound annual growth of 16.58% and 14.00%, respectively, while operating income had compound
annual growth of 17.07%.
In 1884, the Dutch colonial government established a private company to provide postal services
and domestic telegraph services and, subsequently, international telegraph services. Telephone services
were Ñrst made available in Indonesia in 1882 and, until 1906, were provided by privately-owned
companies pursuant to a 25-year government license. In 1906, the Dutch colonial government formed a
government agency to assume control of all postal and telecommunications services in Indonesia. In
1961, most of these services were transferred to a newly-established state-owned company to provide
postal and telecommunications services in Indonesia, apart from services in Sumatera, which were
transferred in the 1970's. The Government separated postal and telecommunications services in 1965
into two state-owned companies, PN Pos dan Giro, and PN Telekomunikasi. In 1974,
PN Telekomunikasi was further divided into two state-owned companies, Perusahaan Umum
Telekomunikasi (""Perumtel'') and P.T. Inti, to provide domestic and international telecommunications
services and telecommunications equipment manufacturing, respectively. In 1980, the international
telecommunications business was transferred from Perumtel to Indonesian Satellite Corporation
(""Indosat'').
In 1991, Perumtel was transformed into ""Persero,'' a state-owned limited liability corporation with
commercial purposes, and renamed Perusahaan Perseroan (Persero) P.T. Telekomunikasi Indonesia,
known as TELKOM. Prior to 1995, TELKOM's business was segregated into 12 regional operating units,
known as ""Witels,'' which were centrally controlled by TELKOM's headquarters in Bandung, West
Java. Each Witel had a management structure responsible for all aspects of TELKOM's business in their
respective regions, from the provision of telephone services to property management and security.
During 1995, TELKOM restructured its operations (the ""Restructuring'') by converting all twelve
Witels into seven Regional Divisions (Division I, Sumatera; Division II, Jakarta and the surrounding
areas; Division III, West Java; Division IV, Central Java; Division V, East Java, including Surabaya;
Division VI, Kalimantan; and Division VII, Eastern part of Indonesia) and one Network Division. As
part of the restructuring, the Company's business activities were divided into three main areas, which
were core, related, and supporting business. The Company also entered into KSO Agreements with
Ñve private sector consortia, each of which includes prominent international telecommunication
operator(s), to develop and manage Ñve of TELKOM's seven regional operating divisions with
TELKOM. Furthermore, on November 14, 1995, the Government sold TELKOM shares through a global
initial public oÅering.
In December 1996 and May 1999 the Government sold 388 million and 898 million of its B shares
respectively. Pursuant to Law No. 1 of 1995 on Limited Liability Companies, the minimum issued and
fully paid stock at 25% of the Company's authorized capital stock amounts to Rp 5 trillion. To conform
to the Law, at the Annual General Meeting of the Stockholders in 1999, it was resolved to increase the
issued and fully paid capital stock by capitalizing Additional Paid-in Capital into 746,666,640
Series B shares resulting in a total of 10,079,999,640 outstanding shares.
Capital Expenditures
During 2000, the Company spent Rp 2,103.3 billion on Capital Expenditures. Out of these Capital
Expenditures approximately Rp 1,165.8 billion was spent for infrastructure development,
10
Rp 734.4 billion for PMVIS, and Rp 203.1 billion for support business. The breakdown of 2000 CAPEX is
as follows:
Rp
(billions)
Infrastructures ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,165.83
PMVIS:
Phone-Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 528.03
Mobile-Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì
View-NetÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.28
Inter-Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 98.68
Service-Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 107.38
Sub TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 734.37
Support ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 203.11
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,103.31
During 1998, 1999, and 2000 total Capital Expenditures were Rp 4,485.0 billion, Rp 2,713.8 billion,
and Rp 2,103.3 billion respectively.
Capital Expenditure Plan 2001

TELKOM's capital expenditure plan for the year 2001 totals approximately Rp 3,625.89 billion,
which will be funded by cash generated internally of Rp 3,183.64 billion, and the remaining Rp 442.25
billion by committed two step loans. The Company uses an assumed Rupiah/U.S. Dollar exchange rate
of Rp 9,100 • US$1.00 for its 2001 capital expenditure plan.
Capex for the year 2001, as mentioned above, is categorized in accordance with TELKOM's
business development plan, to reÖect the Company's present intentions to become a leading company
in information and communication business in the region (See: ""Business Strategy''). The Capex is
allocated as follows: (i) development of infrastructure consisting of transmission network, access
network, infrastructure of data backbone, and infrastructure of PSTN backbone in the amount of
Rp 1,728.25 billion; (ii) development of phone business in the amount of Rp 144.36 billion; (iii) the
development of mobile business, particularly of the DCS-1800 supported by GPRS and WAP Gateway
in the amount of Rp 594.45 billion; (iv) development of view/cable TV business Rp 2.99 billion;
(v) internet development in the amount of Rp 129.64 billion for IP high speed, VoIP, and IP value
added services; and (vi) Rp 273.87 billion spending in supporting service development consisting of a
billing system, network management systems, management information systems, call centers, and
enterprise business. The remaining Rp 752.33 billion will be used for supporting capital expenditure,
consisting of expenditures such as interest during construction, provision for foreign exchange, project
operating cost, research & development, contingency, operating capital expenditures for JOS, and other
facilities. The following table shows the Company's planned capital expenditures for the year 2001:
2001
Business Development Rp
(in billions)
Infrastructure ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,728.25
Transmission Network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 430.45
Access Network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 973.02
Data Backbone ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 152.54
PSTN BackboneÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 172.24
Phone ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 144.36
Mobile ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 594.45
View/cable TV ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.99
Internet ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 129.64
Service ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 273.87
Supporting ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 752.33
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,625.89
11
TELKOM's 2001 capital expenditure plan and the implementation of such plan are subject to
change depending on actual facts and circumstances as they may develop from time to time.
Infrastructure Development
The development of infrastructure consists of (i) Rp 430.45 billion for a transmission network
which includes a Ñbre optic transmission network in the city of Jakarta and Surabaya, a backbone/long
haul transmission network, and an additional ground satellite segment, (ii) Rp 973.02 billion for access
network which includes Ñbre access network, copper access network, HFC, wireless access, and High
Speed Multimedia Access using DSL technology (iii) Rp 152.54 billion for data backbone which
includes Router Core and Edge, ATM Network, Frame Relay, and Remote Access Server,
(iv) Rp 172.24 billion for infrastructure of PSTN network which includes upgrading PSTN local switch,
and additional capacity for PSTN trunk. The total budget for infrastructure development is
Rp 1,728.25 billion.
Development of Phone Business
TELKOM plans to invest Rp 144.36 billion in the year 2001 on expanding and improving phone
business consisting of: (i) Rp 84.53 billion for additional capacity; (ii) Rp 13.61 billion for additional
ISDN capacity and PSTN Value Added Services; and (iii) Rp 46.22 billion for Intelligent Network.
Development of Mobile Business
TELKOM plans to invest Rp 594.45 billion for DCS-1800 infrastructure supported by WAP
application and GPRS in the year 2001 which includes: (i) Rp 401.71 billion for Mobile Switching
Center, Base Station Controller, and Base Transceiver Station; (ii) Rp 85.44 billion for WAP, GPRS, and
IN; (iii) Rp 40.36 billion for approach link; and (iv) Rp 66.94 billion for mobile planning tools and
supporting facilities.
Development of View/Cable TV Business
In the year 2001, TELKOM plans to invest Rp 2.99 billion on development of business view/cable
TV such as Pay TV, High Speed Internet Access, and Direct to Home (DTH) service. TELKOM is
expected to acquire approximately 10,000 subscribers for Pay TV, approximately 1,800 customers for
High Speed Internet Access using HFC, and approximately 2,900 customers for DTH service.
Development of Internet/Multimedia Business
TELKOM plans to spend Rp 129.64 billion on internet/multimedia business development which

includes: (i) Rp 22.38 billion on IP high speed; (ii) Rp 49.91 billion on VoIP services and E1 for RAS/
Gateway, (iii) Rp 17.55 billion on Internet Data Center (iv) Rp 20.43 billion for Multimedia VAS, and
(v) Rp 19.38 billion for B2B e-commerce.
Development of Business Service
TELKOM plans to spend Rp 273.87 billion for improvement of TELKOM's service to its business
and other customers by optimizing customer care facilities such as call centers, billing systems for all
services, management information systems and the Total Solution Service/Enterprise business.
Supporting Facilities
The Rp 752.33 billion for supporting capital expenditure consists of Rp 151.04 billion for research &
development, vehicle, oÇce equipment, contingency, and other facilities, and the remaining
12
Rp 601.29 billion is allocated for interest during construction, provision for foreign exchange, project
operating cost, which are related to the above mentioned Development Project, as detailed below:
2001
Supporting Rp (billion)
Supporting FacilitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 151.04

Supporting related to development of:
Infrastructure ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 551.44
P-NetÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28.30
Mobile-NetÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.99
View-Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1.02
I-Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4.17
Service-Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13.37
Sub Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 601.29
Total SupportingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 752.33
B. Business Overview
The Company provides a broad range of telecommunications services in Indonesia. The following
table sets forth the contribution of each major service area to TELKOM's operating revenue, for the
periods indicated.
Percentage Percentage
Year Ended of Total Year Ended of Total
December 31, Operating December 31, Operating
1999 Revenues 2000 Revenues
(Rp in millions) (Rp in millions)
Operating revenues
Telephone services
Local and domestic long distance
Usage(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,570,891 45.8 4,097,093 43.7
Installation charges(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 68,277 0.9 75,382 0.8
Monthly subscription charges ÏÏÏÏÏÏÏÏÏÏÏ 799,074 10.3 887,355 9.4
Phone cards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ -8,645 -0.1 34,426 0.4
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 99,305 1,3 83,608 0.9
Total telephone revenuesÏÏÏÏÏÏÏÏÏÏÏ 4,528,902 58.2 5,177,864 55.2
Revenue Under Joint Operation
Scheme (JOS)
Minimum TELKOM Revenues (MTR) ÏÏÏÏÏ 1,452,912 18.6 1,556,699 16.6
Distributable TELKOM Revenues (DTR)ÏÏÏ 208,956 2.7 695,106 7.4
Amortization of unearned initial investor
payment under JOS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,349 0.2 15,349 0.2
Total Revenue Under JOS ÏÏÏÏÏÏÏÏÏÏ 1,677,217 21.5 2,267,154 24.2
13
Percentage Percentage
Year Ended of Total Year Ended of Total
December 31, Operating December 31, Operating
1999 Revenues 2000 Revenues
(Rp in millions) (Rp in millions)
Interconnection revenueÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 892,050 11.4 1,121,482 12.0
Other telecommunications services
Revenue under revenue sharing
Arrangement(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 308,147 4.0 308,365 3.3
Leased lines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100,475 1.3 193,869 2.1
Satellite transponder ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 215,790 2.8 183,255 1.9
Telex and telegram ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,078 0.2 7,498 0.1
Multimedia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35,407 0.4 65,164 0.7
Others(4) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19,143 0.2 51,055 0.5
Total other telecommunications services
Revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 692,040 8.9 809,206 8.6
Total operating revenue ÏÏÏÏÏÏÏÏÏÏÏÏ 7,790,209 100.0 9,375,706 100.0
(1) Local and domestic long distance usage including revenues from 405,463 and 409,818 PBH lines in service as of December 31,
1999 and 2000, respectively, which are reÖected under Revenue Sharing Arrangement (Ñxed wire line).
(2) Excludes installation charges for Ñxed wire lines placed in service subject to PBHs.
(3) Includes TELKOM's revenue sharing from PBH cellular operators.
(4) Includes revenues from ISDN, IN, VSAT, telefax and value added services.
Telephone Services
As of December 31, 2000, the number of lines in service was 6.66 million lines, consisting of
6.32 million subscribers' lines and 345,307 public phones including kiosk phones. The subscribers are
segmented by business, residential (including Government agencies), and social subscribers (mainly
non-proÑt organization). TELKOM's subscribers pay one time installation charges, on going monthly
subscription charges, and pay usage charges for local and domestic long distance services which are
generally uniform nationwide and are based on call distance, call duration and the time the call is
made.
The Company's development in installed lines, lines in service, and traÇc volume and certain of
their respective annual growth rates during the period of 1996 Ì 2000 (including KSO Division) can be
seen in the following table:
As of December 31,
1996 1997 1998 1999 2000
Installed lines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,808,849 6,523,724 7,197,099 7,429,262 7,668,077

Growth (%)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30.0 12.3 10.3 3.2 3.2
Lines in service ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,186,030 4,982,466 5,571,644 6,080,193 6,662,605
Growth (%)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27.2 19.0 11.8 9.1 9.6
Year Ended December 31,
1996 1997(2) 1998 1999 2000
(1)
TraÇc volume
(millions of Pulses) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35,347 42,144 45,905 47,259 52,859
Growth (%) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 25.1 19.2 8.9 2.95 11.85
(1) Figures indicated exclude public phone.

(2) As a result of decreases of pulse duration in 1997, volume measured in pulses is not directly comparable.
14
Meanwhile, the TELKOM lines among Regional Divisions as of December 31, 2000, are illustrated
in the following table:
Division I Division II Division III Division IV Division V Division VI Division VII Total
(Sumatera) (Jakarta) (West (Central (East (Kalimantan) (East
Java) Java) Java) Indonesia)
Local Exchange
Capacity ÏÏÏÏ 1,128,400 3,123,519 878,860 754,534 1,392,096 381,871 802,742 8,462,022
Installed Lines 1,027,706 2,777,394 714,583 721,164 1,308,904 361,481 756,845 7,668,077
Lines in
Service ÏÏÏÏÏ 897,323 2,412,221 639,913 579,647 1,198,142 302,948 632,411 6,662,605
Utilization Rate
(LIS/IL) ÏÏÏÏ 87.31 86.85 89.55 80.38 91.54 83.81 83.56 86.89
Employees(1) ÏÏ 5,880 9,238 2,922 3,307 4,526 1,574 5,105 32,552
Population
(millions)(2) 45.4 24.5 25.4 39.2 38.3 12.4 31.5 216.8
Line
Penetration(%) 2.0 9.8 2.5 1.5 3.1 2.5 2.0 3.1
Population
Density (per
km)(2) ÏÏÏÏÏÏ 97 1,809 792 891 605 21 40 108
(1) Total TELKOM employees as of December 31, 2000 were 37,705 including 4,661 employees in the Supporting Division and
Corporate OÇce.
(2) Source: Indonesian Central Bureau of Statistics (Projected Ñgures only).
In 2000, telephone services contributed Rp 5,177.86 billion or 55.23% of TELKOM's total operating
revenues. No single customer accounted for more than 1% of TELKOM's total telephone revenues, and
TELKOM estimates that its top 100 customers (other than interconnection customers) together
accounted for less than 5% of TELKOM's total telephone revenues in 2000.
Joint Operation Scheme Services (KSO)

As of December 31, 2000, of the total number of 6.66 million lines in service, 3.05 million lines were
in the KSO regions, which consists of 2.92 million subscriber lines and 0.13 million public phones
including kiosk phones. Revenue from all KSO Regions amounted to Rp 2,267.15 billion or 24.2% of the
Total Operating Revenue. The revenue consisted of Rp 1,556.7 billion as MTR payments, Rp 695.1
billion as DTR payments and Rp 15.3 billion as amortization of initial investor's payments.
Each KSO Revenue performances for the last three years (1998 Ì 2000) are indicated in the
following table:
1998 1999 2000
KSO-Division MTR DTR MTR DTR MTR DTR
(Rp billion) (Rp billion) (Rp billion)
Division I (Sumatra) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 464.6 40.1 471.6 64.2 488.2 206.5
Division III (West Java)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 307.5 29.1 312.1 34.1 344.0 79.9
Division IV (Central Java) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 316.2 19.4 321,0 31.6 355.8 107.9
Division VI (Kalimantan) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 135.0 20.1 135,0 31.4 137.0 101.9
Division VII (Eastern Indonesia)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 210.1 34.0 213.2 47.6 231.7 198.9
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,433.4 142.7 1,452.9 208.9 1,556.7 695.1
Interconnection Services
TELKOM and the KSO Units receive interconnection revenues from operators of other telecommu-
nications services, such as mobile cellular, Ñxed cellular, Ñxed wire line, and international long distance,
that interconnects with the PSTN. Under the current interconnection regime, mobile cellular networks
are not required to interconnect with the PSTN.
15
Interconnection traÇc volumes are indicated in the following table:
Year Ended December 31,
1996 1997(1) 1998(1) 1999(1) 2000(1)
(millions of minutes)
Mobile Cellular
GSM
Incoming paid minutes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 261.1 1,492.6 920.8 1,396.8 1,988.6
Outgoing paid minutes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 114.9 350.7 604.8 873.2 1,687.1
AMPS/NMT-450
Incoming paid minutes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 161.3 255.1 119.7 62.9 71.8
Outgoing paid minutes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.0 56.1 62.0 24.7 34.0
Subtotal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 542.4 2,154.4 1,707.4 2,357.7 3,781.5
Fixed Cellular
Subtotal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35.7 35.2 63.6 75.0 111.8
Total cellular paid minutes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 578.1 2,189.6 1,771.0 2,432.7 3,893.3
Fixed Wire line Interconnection(2)
Incoming paid minutes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 7.4 26.1 30.1
Outgoing paid minutes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 0.4 2.9 3.3
Total paid minutes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 7.8 29.0 33.4
International Interconnection
Total paid minutes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 607.0 697.5 717.9 654.3 596.3
(1) International paid minutes includes data from Indosat 001 and Satelindo 008, which does not include minutes from mobile
cellular and Ñxed wireless operators that are interconnected directly with international gateways.
(2) For 1998, four months ended December 31,1998.
During 2000, TELKOM received Rp 1,121.5 billion from interconnection services or 12% of
TELKOM's total operating revenue.
Other Telecommunication Services
The Company provides a variety of other services such as leased lines, satellite transponders, telex
and telegram. Among those services, the revenue under PBH and the satellite transponder contributed
a signiÑcant amount to TELKOM's other telecommunication services revenue. During the year 2000,
other telecommunication revenues booked Rp 809.2 billion.
Network Infrastructure
General
The Network comprises a hierarchy of exchanges ranging from the local exchange through trunk
exchanges: the primary, secondary and tertiary exchanges. Each local exchange is connected to the
subscriber's premises by equipment and facilities called outside plant. Outside plant includes wire line
and wireless local transmission links and the distribution facilities joining them.
During 2000, TELKOM achieved a local call completion rate of 72.97%, an improvement of 3.31%
compared to the previous year, and a domestic long distance call completion rate of 65.82%, an
improvement of 4.51% on the previous year's rate. The penetration rate was 3.07 lines in services per
100 inhabitants, among the lowest in the world.
16
Outside Plant and Switching Facilities
As of December 31, 2000, TELKOM's 8.5 million lines exchange capacity were connected to
4.5 million and 4.0 million local exchanges in the Non-KSO and KSO Divisions, respectively. TELKOM
and the KSO Partners have already used copper wire, optical Ñbre, radio access, and hybrid Ñbre
coaxial as medium of access network.
The Company believes that digitalization substantially increases network eÇciency, performance,
and call routing Öexibility. As of December 31, 2000, digitalization of TELKOM's switching facilities was
100% at trunk exchanges. By the end of 2000, the capacity utilization rate for both Non KSO Divisions
and KSO Divisions was 78.74%.
Transmission Facilities
Transmission facilities refer to all kinds of transmission media that link exchanges together. As of
December 31, 2000, TELKOM utilizes 3,431 kilometres of optical Ñbre to link high volume routes such
as Jakarta-Surabaya, and 2,875 kilometres of submarine cable to link Sumatera-Java-Kalimantan and
Sulawesi.
TELKOM currently operates TELKOM-1, Palapa B-4 satellites, and 179 earth stations including 1
satellite control system. TELKOM-1 has 36 transponders including 12 extended C-band transponders
replacing the Palapa B2R, which reached the end of operational life in November 1999. The Palapa B-4,
which has 24 transponders is due to reach the end of its normal operational life in May, 2001. In
addition to its own purpose, the Company leases satellite transponder capacity and provide earth
station satellite up linking and down linking services to domestic and international users. TELKOM
uses its satellites for (i) providing network backbone transmission; (ii) providing rural telecommunica-
tion service; (iii) providing back-up for the national telecommunication network; (iv) oÅering satellite
up-linking and down-linking, VSAT, and multimedia services.
The following table illustrates the transmission capacity of the Company's backbone transmission
facilities as of December 31, 2000.
Capacity in Percentage
number of of total
Transmission medium circuits capacity
Optical Ñbre cable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 174,300 54,44

MicrowaveÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 101,970 31,85
Submarine cableÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 33,480 10,46
Satellite ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,426 3,26
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 320,176 100.00
17
Network Development
The number of installed lines during the period of 1996 Ì 2000, including KSO, and the
approximate numbers of lines to be added in Division II and Division V during 2001, are shown in the
following table:
Telkom
Historical Projection
1996 1997 1998 1999 2000 2001
Division II (Jakarta)
Non-PBH linesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 554,475 222,996 158,685 126 48,547 120,624
PBH lines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì
Subtotal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 554,475 222,996 158,685 126 48,547 120,624
Division V (East Java)
Non-PBH linesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 255,761 194,140 86,511 50,653 79,936 125,837
PBH lines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì
Subtotal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 255,761 194,140 86,511 50,653 79,936 125,837
KSO Divisions
TELKOM lines
Non-PBH linesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 416,957 50,256 Ì Ì Ì Ì
PBH lines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì
Subtotal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 416,957 50,256 Ì Ì Ì Ì
KSO Investor
Lines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 114,365 247,483 428,479 181,384 110,332 Ì
Total New Lines
InstalledÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,341,558 714,875 673,675 232,163 238,815 Ì
Partnership Arrangements and Joint Ventures

To Ñnance investment opportunities, TELKOM has three types of partnership with private
investors. These partnerships are in the form of revenue Sharing Scheme (PBH), Joint Operation
Scheme (KSO), and Joint Ventures Company (JVC). Each cooperation with a private entity has a
diÅerent contribution toward TELKOM's proÑt and loss statement. In addition to partnership arrange-
ment, TELKOM also entered into a joint cooperation with several business partners.
PBH
Currently, TELKOM has several PBHs for Ñxed wire line and mobile cellular services. In 2000,
TELKOM revenues from PBH were Rp 308.4 billion or 3.3% of TELKOM's Total operating revenue and
this contributes to other telecommunication services revenues.
Historically, TELKOM provided analog cellular services through PBH arrangement with several
private investors. By the year 2000, all but one of the analog cellular PBH schemes were transformed to
joint venture arrangements, with TELKOM as a minority shareholder in each.
The only analog cellular service subject to PBH arrangement is PT Telesera, using AMPS cellular
networks operating in Bali, Kalimantan and Southern Sumatera with a total of 7,556 subscribers as of
December 31, 2000. The PBH scheme sets the revenue share at 30% Ì 70% between TELKOM and
Telesera, respectively. The PBH will expire on June 2001, where all assets will be transferred to
TELKOM.
KSO
In June 1995, following an international tender, TELKOM and the Minister of Tourism Post and
Telecommunications (MTPT) announced the names of the successful bidders for KSO in respect of the
development and operation of TELKOM's basic Ñxed telecommunications facilities and services in Ñve
18
of TELKOM's seven Regional Divisions. In the fourth quarter of 1995 each of the KSO Agreements,
including their related construction contracts and certain related agreements, were signed by the
respective parties.
The Joint Operating Scheme or KSO Agreement is a form of contractual joint operation scheme
under which each KSO Investor, through the KSO Unit, is responsible for the operation of the local
network in the respective KSO Region for a period of 15 years, ending December 31, 2010. Each KSO
Region is operated by a diÅerent KSO Unit, involving separate international telecommunications
operator.
The main terms of each KSO Agreement are substantially similar, except for the Ñnancial terms
described below. Each KSO Unit is treated as a division of TELKOM, managed and operated by the
KSO Investor in the name of TELKOM for and on behalf of TELKOM and the KSO Investor. Four of the
Ñve KSO Units began to manage, operate, repair and maintain their respective KSO Division's assets
for a 15-year period commencing January 1, 1996. The Ñfth KSO Investor, Cable & Wireless Mitratel,
commenced management and operation of Division VI on April 1, 1996. All KSOs expire on the same
date, December 31, 2010. The KSO Investors are to undertake the planning, designing, engineering,
Ñnancing and constructing a minimum of two million installed lines in the aggregate.
Due to the economic crisis, the KSO investors had diÇculties carrying out their obligations
according to the KSO Agreement. In order to assist the KSO Investors to continue their obligations and
maintain the continuity of the agreement, TELKOM has provided them short-term relief by signing a
Memorandum of Understanding (MOU) on June 5, 1998.
TELKOM receives three principal types of payments from each KSO Unit or KSO Investor during
the term of the KSO i.e.: (i) a one-time Initial Investor Payment, (ii) Minimum TELKOM Revenues
(MTR) and (iii) Distributable TELKOM Revenues (DTR). At the end of the KSO period, all of the lines
constructed by the KSO Investors are to be transferred to TELKOM for a nominal payment.
The following table sets forth certain information concerning the KSOs. Such information has been
derived from the KSO Agreements, the June 5, 1998 Memorandum of Understanding and other related
sources.
Division I Division III Division IV Division VI Division VII Total
KSO Investor ÏÏÏÏÏÏÏÏÏÏÏÏÏ Pramindo Aria West Mitra Global Daya Mitra Bukaka SingTel Ì
Ikat International Telekomunikasi Telekomunikasi
Indonesia
Participants in the KSO
Investor
Foreign
Telecommunications
Operator ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ France US West Telstra Global Cable & Singapore Ì
Cables et International Ltd. (20%) Wireless Telecommunication
Radio SA BV (35%) Nippon (Singapore) International
(35%) Telegraph and Pte, Ltd. Pte. Ltd. (40%)
Telephone (25%)
Corporation
(15%)
Indonesian and Other
Participant ÏÏÏÏÏÏÏÏÏÏÏÏÏ P.T. Astratel P.T. Artimas Indosat (30%) P.T. Intidaya P.T. Bukaka Ì
Nusantara Kencana P.T. Widya Sistelindomitra Telekomindo
(40%) (52.5%) Duta Kharisma Tbk. International
Indosat Asian Informindo (38.71%) (60%)
(13%) Infrastructure (15%) P.T. Mitracipta
Marubeni Fund (12.5%) P.T. Krida Sarananusa
Corporation Salindo Sentosa (26.61%)
(8%) (10%) TM
Others (4%) Others (10%) Communications
(H.K.) Ltd.
(9.68%)
19
Division I Division III Division IV Division VI Division VII Total
Minimum new line

Installation(1) ÏÏÏÏÏÏÏÏÏÏÏ 290,000 290,000 350,000 115,000 223,000 1,268,000
Initial investor payment to
TELKOM (US$ millions) $35 $30 $10 $20 $10 $105
Minimum TELKOM
Revenue (2000)
(Rp Millions)(2) ÏÏÏÏÏÏÏÏÏ Rp 488,156 Rp 343,969 Rp 355,800 Rp 137,052 Rp 231,722 Rp 1,556,699
TELKOM's Revenue
Sharing (2000)(3) ÏÏÏÏÏÏÏÏ 30% 30% 30% 30% 35% Ì
Distributable TELKOM
Revenue (2000)
(Rp Million) ÏÏÏÏÏÏÏÏÏÏÏ Rp 206,497 Rp 79,911 Rp 107,962 Rp 101,861 Rp 198,875 Rp 695,106
(1) Minimum new line installation by the KSO Investors during the Construction Period, which ends March 31, 1999, as
required by the KSO Agreements Amendment.
(2) The 2000 MTR amounts shown are the amounts provided for by the KSO Agreements.
(3) The 2000 TELKOM Revenue Sharing percentages shown are the percentages provided for by the KSO Agreements.
KSO's Principal Financial Terms
Overview. Each KSO Unit is (i) operated as a separate entity for accounting purposes,
(ii) responsible for certain payments to TELKOM, (iii) entitled to revenues generated from all lines in
service within the geographical KSO Division on a sender-keep-all basis, and (iv) responsible for all
costs associated with operation of the KSO Unit.
TELKOM is entitled to receive with respect to each KSO Division (i) a one-time Initial Investor
Payment, (ii) Minimum TELKOM Revenues (MTR) and (iii) Distributable TELKOM Revenues
(DTR).
Initial Investor Payment. Within 1 (one) month after the KSO Agreements were signed, each KSO
Investor made an agreed one-time payment to TELKOM (""Initial Investor Payment''), totalling
US$105 million. The Initial Investor Payment is amortized over the KSO Period.
MTR and DTR. The amount of the MTR payments in each KSO Division is subject to adjustments
in certain circumstances in connection with the construction of new installations by the KSO investors,
completion of TELKOM's existing projects, and certain force majeure events. Apart from force-majeure
events, over which the Company has no control, TELKOM does not expect the amount of the
adjustments to be material individually or in the aggregate in any given month or over time.
The KSO Unit is required to pay to TELKOM on a monthly basis, DTR payments, which comprise
a revenue share of 30% (except for KSO Unit VII, in the eastern part of Indonesia: 35%) of the
diÅerence of Total KSO revenues for the month less the MTR payment less the KSO operating
expenses (as deÑned below) for the month (such diÅerence is referred to as the ""Distributable KSO
revenues''). Total KSO revenues are essentially based on a sender-keep-all structure where the KSO
Unit is entitled to collect revenues from the operation of the KSO Unit and all interest earned thereon,
including installation charges, monthly subscription charges, pulse charges, and charges for other
telecommunications services oÅered to subscribers, TELKOM's interconnection revenue for interna-
tional calls originating from or terminating in the KSO Division, all revenues derived from PBH basic
(telephone) telecommunications services and operations in the KSO Division, an agreed portion of
interconnection payments from third party telecommunications service providers such as interconnect-
ing wireless telecommunications operators, and payments from public telecommunications kiosks and
payphone operators in the KSO Division. The KSO Unit is also responsible for all expenses directly
incurred by the KSO Unit in their respective region, except depreciation, amortization, interest or
Ñnancing charges in respect of either New Installations or Existing Installations.
20
Structure, Operation and Ownership
KSO Investors are licensed by the MOC (formerly, the MTPT) to operate Ñxed line and Ñxed
wireless services in the KSO Divisions under the terms of exclusivity granted to TELKOM in the name
of TELKOM and for and on behalf of TELKOM and the KSO Investor. The KSO Investors are
accountable for the achievement of speciÑc operational performance targets during the KSO Period
relating to the expansion and quality of telecommunications services. The operational targets for each
KSO Unit are set forth in the KSO Agreement for each Division.
Employees and Management of the KSO
Each KSO Unit is staÅed by existing TELKOM employees in each KSO Division, supplemented by
additional management staÅ hired by the KSO Investor. Such additional employees remain the
employees of the KSO Investor. All employees are paid by the KSO Unit. Compensation and other
beneÑts payable to TELKOM KSO employees are determined by the KSO Unit's management. The
KSO Division, to the extent reasonably possible, is required to make maximum use in its operations of
available Indonesian human and material resources, goods and services, including resources and
services provided by business support services of TELKOM.
Early Termination
A KSO Agreement may be terminated by either party upon the material breach of the other party's
obligations under the KSO Agreement or the related Construction Agreement. In addition, TELKOM
may terminate a KSO Agreement in certain speciÑc circumstances, including a KSO Investor's failure to
(i) meet the agreed construction timetable for two consecutive quarters or (ii) complete construction
and successfully pass an interconnection test prior to the end of the Construction Period.
Asset Disposition at End of KSO Period
The ownership of the new installations is to be automatically transferred to TELKOM for nominal
consideration of Rp 100 at the end of the KSO period and TELKOM is to take over the operations of the
KSO Units at that time. TELKOM is also to reimburse each KSO Investor for additional new
installations which are not fully paid for out of KSO Unit revenues by the end of the KSO Period in an
amount equal to the net present value of the KSO Investor's projected share of Distributable KSO
Revenues attributable to any additional new installation over the balance of the applicable Payback
Period, plus an amount to be agreed by TELKOM and such KSO Investor as fair compensation in
respect of any uncompleted and untested Additional New Installations.
Additional Installations
The KSO Investors have the exclusive right during the Construction Period to construct public
switched telephone facilities (subject to Existing Installations) in the KSO Divisions. Thereafter, for the
remainder of the KSO Period, the KSO Investors have a Ñrst right of negotiation to construct Additional
New Installations in their KSO Divisions. The payback period of such Additional Installation is to be
agreed by TELKOM and the KSO Investors and approved by the Minister of the MOC (formerly the
MTPT) (the ""Payback Period'').
Other
TELKOM has agreed to indemnify the KSO Investors for certain losses, which may be incurred by
the KSO Investors as a result of speciÑc actions of TELKOM that are inconsistent with the KSO
Agreements.
21
Developments Relating to the KSO
Due to the economic crisis, the KSO investors had diÇculties carrying out their obligations
according to the KSO Agreement. In order to assist the KSO Investors to continue their obligations and
maintain the continuity of the agreement, TELKOM has provided them short-term relief by signing a
Memorandum of Understanding (MoU) on June 5, 1998.
With regard to the expiration of the MoU during the month of November and December 1999,
TELKOM and the KSO investors had conducted meetings concerning the KSO operational and
Ñnancial performances as well as the organizational eÅectiveness of the scheme. In essence, the parties
have agreed to return to the most of the terms of the original KSO Agreement beginning January 1,
2000.
However, as a result of the rapid Rupiah depreciation and insuÇcient or no tariÅ increase in 1999
and 2000, respectively, the KSO partners refused to develop more lines, due to the loss of the economic
viability of the business. The KSO partners assert an increase in tariÅ, but TELKOM considered that the
assertion has to be plead to the Government which, as regulator, has the authority in the telecommuni-
cations sector. The long-term KSO solution is closely connected with the restructuring of the
Indonesian telecommunications industry commenced by the Government and is strongly inÖuenced by
the Indonesian investment climate. The matter was stipulated on one article of the LoI with IMF.
The Government, acting as the mediator of negotiations between TELKOM and KSO Investors,
expected that the negotiations would solve the problem and bring mutual advantages to both parties
and could ensure: (i) the continuing long term development of telecommunications facilities,
(ii) developing a conducive investment climate, and (iii) inventing a healthy telecommunications
industry structure in Indonesia.
The Company believes that whatever solution is taken for the KSO problem, it should take into
account several considerations i.e. company value, investment in telecommunications infrastructures,
shareholder approval, customer service, and employees response. The Company shall optimize the use
of cash generated internally by adjusting the terms of payment of the transactions.
KSO I
TELKOM had conducted preliminary meetings with PT Pramindo Ikat Nusantara (KSO Partner in
Region I Sumatera) concerning the possible ""sell back'' of KSO I Assets to TELKOM, however, both
parties have not determined the amount and terms of payment. The Company indicates that if the
transaction occurs, payments shall be done during 2002.
KSO III
On September 11, 2000, TELKOM and PT Aria West International (Ariawest currently operates
KSO-Region III of West Java) have signed a Good Faith Interim Solution Agreement as a supplement
to the KSO Agreement. The agreement contains several items including performance bond, operating
capital expenditures including Y2K, Multimedia Feasibility Study, and the appointment of General
Manager and Deputy General Manager of the KSO Unit Regional Division III.
Ariawest International has oÅered TELKOM to buy the KSO Asset's in KSO III. In response to the
oÅer, TELKOM has invited Ariawest for discussions.
KSO IV
On February 2001, TELKOM and Indosat signed a Memorandum of Understanding for the transfer
of the Company's rights and obligations as a party to the KSO Agreement between the Company and
PT Mitra Global Telekomunikasi Indonesia (KSO partner in Region IV Central Jawa & DIY) and
transfer of the Company's asset under the KSO Agreement to PT Indosat for U.S.$375 million as part of
a series of transactions that would eliminate the cross-shareholdings of Telkom and Indosat and
22
alternative source of internal funding. The transaction is subject to certain conditions, including
regulatory and corporate approvals. It is currently anticipated that both Telkom and Indosat will seek
shareholder approval by the end of April. If approved, Indosat will own the KSO IV assets in Central
Java and DI Yogyakarta (See ""Material Contracts''). As of December 31, 2000, Indosat holds a 30.6%
stake in MGTI, Telkom's partner in the KSO IV joint operating scheme, which will remain in eÅect
through December 31, 2010. MGTI's other shareholders include NTT (15.3%) and Telstra (20.4%).
KSO VI
On March 14, 2001, TELKOM and PT Daya Mitra Telekomunikasi (DMT' KSO Partner in
Region VI Kalimantan) have signed a Memorandum of Understanding for the acquisition of 90.32%
interest in DMT for U.S.$121.93 million. DMT, has existing debt obligations of approximately U.S.$88.5
million. In connection with the transaction, TELKOM expects to assume responsibility for a portion of
the debt. TELKOM shall make an initial payment of U.S.$18.29 million upon completion of the
transaction and will pay the remaining amount in equal quarterly installments within 2®two© years.
The transaction is still subject to certain conditions and the parties obtaining necessary corporate
approval.
KSO VII
TELKOM and PT Bukaka Singtel (the KSO Partner in Region VII Eastern Indonesia) intend to
continue the KSO schemes in accordance with original agreements and certain modiÑcations, which
beneÑts both parties. The Company has also reached an agreement with the KSO Partner to construct
lines in the city of Manado referred to as ""Manado Millennium'' which shall be followed by other such
projects.
Joint Ventures
Currently, TELKOM has several joint venture companies for mobile cellular services and other
telecommunication related businesses. TELKOM revenues from joint ventures are derived from usage
of TELKOM's infrastructure (including interconnection) and dividends. (See Item 9. The OÅer and
Listing Ì Subsidiary Information).
Partnership
In order to implement the PMVIS strategy (See ""Business Strategy'') in a faster and more eÅective
way, TELKOM is determined to carry out the business through several partnership arrangements.
TELKOM has selected several experienced companies having various competencies, planning and
sales; good business track records; and ready to commit to provide Ñnancing and other resources. The
partnerships objective are to strengthen horizontal linkage, by establishing business partners in terms
of combining resources, sharing risks and beneÑts, speeding up implementation, and leveraging
business value, rather than just mere technology vendors. However, the term partnership shall not be
referred to as a form of company in relation to corporate law. In no event shall parties involved be
deemed as a partner in this sense.
23
On October 12, 2000, TELKOM has signed memorandums of understanding for the formation of
9 (nine) business partnerships, which has to be followed by joint planning sessions before the signing
of each contract, namely:
No. Partners Business Area
1. PT Alcatel Indonesia Cable TV

2. PT Lucent Technologies N.S.I. Multimedia Access
PT Internusa Distribusi Netindo
3. PT Alcatel Indonesia Multimedia Access
PT ABC Telekomunikasi
PT Adhiloka Sejahtera
4. PT Ericsson Indonesia Multimedia Access
PT Pyramid Indo Usaha
5. Gilat Satellite Networks Ltd. Internet Protocol High Speed
PT Citra Sari Makmur
6. PT NEC Nusantara Comm. Voice Over Internet Protocol
Sumitomo Corporation
PT Stimec Alita Nasio
PT Datacraft Indonesia
7. PT Lucent Technologies Network Systems Intelligent Network
Indonusa
8. PT Swara Tatanan Parama Guna Personal Handy-Phone System
PT Industri Telekomunikasi Indonesia
PT Nasio Karya Pratama
PT Laras Sarkomindo
PT AmaÑndo Persada
Japan Radio Co.
9. PT Trans Komunikasi Data Telkom Memo Desa Maju
Business Strategy
The Indonesian telecommunications industry is evolving from the traditional telecommunications

business into the era of convergence of telecommunications, computer, and internet businesses. As the
business environment changes, TELKOM as an incumbent operator, thoroughly recognizes that many
aspects have to be anticipated, such as: customer demand, technological growth and regulation.
In anticipation of business environment changes, TELKOM has set up a new approach. The
Company's vision has been renewed: ""to become a leading InfoCom company in the region''.
TELKOM's aims to become a solution provider in the InfoCom industry by providing ""one stop
service'', whilst ensuring the best quality of service and competitive pricing through utilization of ""state
of the art'' technology and ""partnerships''.
To implement its vision and mission, TELKOM has set 6 (six) strategic policies as follow:
(i) Business Area, TELKOM's core business covers Plain Ordinary Telephone Service abbreviated as
POTS (PhoneNet), Mobile Service (MobileNet), Cable TV and Interactive Service (ViewNet),
Multimedia/Internet (InterNet), and ServiceNet; (ii) Human Resource, management is based on core
competencies of Customer Orientation, Information Technology, Telecommunications Knowledge,
Achievement Orientation, Communication, Innovation and Process Improvement, Teamwork, Adapta-
bility and Diversity Management, and Self Development; (iii) Service Excellence, policy is implemented
to acquire, grow, serve and retain the customers; (iv) Capital Expenditures, investment policy is
intended to support recovery of cancelled investment and to develop new businesses; (v) Good
Corporate Governance, includes business process accountability, conformity, and transparency;
(vi) Good Corporate Citizenship, is intended to implement TELKOM's concern for its surrounding
community.
24
The success of these business strategies strongly relies on good customer service, therefore
TELKOM plans to implement a new excellence in customer service policy through the optimalization of
end user life cycles which cover acquisition, growth, service and retention actions as integrated cycles.
These policies are aimed to retain, acquire and give value added to the customer for the coming
competitive era and implementation of the customer protection laws. In addition, it shall also be
supported by customer care programs, customer acquisition, new product development based on
customer need, and customer retention programs by delivering a service level guarantee or other
incentives in order to form loyalty based customer.
Product Development
TELKOM has been intensively assessing new technologies and services, as well as identifying
business opportunities to enhance the Company value. TELKOM refocuses its core business areas in
Ñve streams as the Company's product development, referred to as PMVIS which includes: Plain
Ordinary Telephone Services/Phone (P); Mobile (M); View (V); Internet (I); and Service (S), so that
it will secure the right strategy for TELKOM's competitive edge. With regard to the global business
phenomenon, TELKOM should pay more attention to mobile and internet/multimedia business as
well. As part of the policy, TELKOM is still continuing to replace copper wire with Ñbre optic to digitise
the network and to enhance broadband capacity for selected high volume business and residential
customers.
To adopt to the new business-opportunities, TELKOM has established 7 (seven) business projects
to cover the 5 (Ñve) core business areas which are: B2B, VoIP, Mobile, Intelligent Network, Calling
Card and Pay-Phone, Cable TV, and Business Enterprise Project.
B2B. The B2B Commerce project shall provide business integration, commerce application, and
security infrastructure, which shall enable TELKOM to become a complete B2B Commerce enabler
company. TELKOM uses a unique strategy and smart business initiative to win the market by targeting
small medium enterprise, government, state own companies, and Ñnancial market. During the year
2000, TELKOM has signed memorandum of understandings with some partners in infrastructure
developments in such areas as: CertiÑcation Authority, on-line banking, Pharmacy On line, e-
government, state-owned enterprise online, on-line supply chain, small medium enterprise online,
electronic settlement, e-procurement, and National Chambers of Commerce (KADIN).
VoIP. TELKOM is currently preparing Voice over Internet Protocol (VoIP) service to strengthen
its core businesses. In December 2000, through a partnership program, TELKOM and PT Vasindo
launched a new high-speed-internet protocol-backbone branded as Domestic Clearing House (DCH),
which enable it to provide settlement and wholesale services for VoIP providers in Indonesia. DCH
supports calling card, premium call, and VSAT services. In 2001, TELKOM plans to launch new-
internet protocol-based-services using a brand name ""Teleponi Hemat'' or ""TELKOM Save''.
Mobile. TELKOM will operate mobile phone services based on DCS-1800 system with 15 Mhz
frequency bandwidth featured with General Packet Radio Services (GPRS), Intelligent Network (IN),
and Wireless Application Protocol (WAP) platforms. This system, which is categorized as two-and-half
Generation (2.5G) mobile cellular, will enable voice and high speed data services (up to 115 Kbps)
such as basic voice, WAP, information services, mobile commerce, telemetry, mobile intranet and
mobile internet. For the above purpose, TELKOM has set up a business project called TELKOMobile to
implement such system. PT Siemens Indonesia and TELKOM have signed a contract to install the DCS-
1800 systems (2.5G) with 200,000 subscribers. The contract amount is EUR 62,744,829 and IDR
24,809,615,817. The system shall be ready for service by the end of August 2001. Commercial launching
is projected to commence on the fourth quarter of 2001 covering Jakarta, Bandung, and Lampung areas
with some possible coverage expansions to Surabaya, Denpasar, and Batam areas with a total target
customer of approximately 360,000 by the end of 2002.
Intelligent Network. In order to accommodate the growth of multimedia and internet/data
services, in September 2000, TELKOM launched a high-speed internet and multimedia content
25
distribution services via satellite under a brand name TELKOMNet Turbo. This service would comprise:
(i) high-speed internet access; (ii) multicasting (web casting and video casting); (iii) Ñle distribution;
and (iv) access to TV digital.
Calling Card. In 2001, TELKOM Calling card business project will expand into card phone
management system (CMS) which can be utilized as a credit card or debit card and to implement
calling card based on IN and VoIP.
Business Enterprise Project. On November 2, 2000, TELKOM signed an Agreement with
C2C Pte. Ltd., a company in which Singtel holds majority shares, to be a landing party for a new
submarine cable system plan, built, operate and maintain by C2C over the Southeast Asia and Trans-
PaciÑc region. The C2C cable network system has a competitive value compared to the existing system
due to the high capacity Ñber optic communications network. TELKOM utilizes this technology to
prepare its international business infrastructure for broadband communication as part of TELKOM's
future technology. TELKOM and C2C will implement joint marketing.
Regulations
The overall program of telecommunications sector deregulation is closely linked to the national
economic recovery program supported by the International Monetary Fund (""IMF''). The national plan
is documented in the Memorandum of Economic and Financial Policies. (""MEFP''), as further clariÑed
in the Letters of Intent (""LoI'') to the IMF in January and May 2000. The main focus of MEFP is to
stabilize the economy and regain trust through a comprehensive plan based on: (i) deregulation;
(ii) pro-competition; (iii) liberalization; (iv) restructuring; (v) market access; and (vi) market oriented
regulations.
The LoI stipulated among other things the requirement of TELKOM and INDOSAT to resolve their
cross-ownership in several aÇliates including Telkomsel, Satelindo, Lintasarta, Patrakom, Menara
Jakarta, and Bangtelindo. In addressing such LoI, TELKOM and INDOSAT have signed an MOU
relating to a series of transactions that would eÅectively resolve the joint ownership arrangement
between TELKOM and INDOSAT (See: ""Material Contracts: Solution to the Cross Shareholdings with
INDOSAT).
In addition to the resolution of cross-ownership problem, the LoI also requires TELKOM and
INDOSAT to divest its ownership in non-strategic aÇliates by the end of 2001. TELKOM is conducting
the study on aÇliates to restructure its business portfolio regarding aÇliates. The compliance to this
requirement may cause the Company to divest its investment in some aÇliates or may add its
investment in some aÇliates, as the Company believes their strategic position.
The Government's telecommunication reform policy as formulated in its ""Blueprint of the
Indonesian Government's Policy on telecommunications'' dated July 20, 1999 (""Blueprint'') is to:
(i) increase the sector's performance in the era of globalization; (ii) liberalize the sector with a
competitive structure by removing monopolistic controls; (iii) increase transparency and predictability
of the regulatory framework; (iv) create opportunities for national telecommunications operators to
form strategic alliances with foreign partners; and (v) create business opportunities for small and
medium enterprises and to facilitate new job opportunities.
The regulatory reforms of the Indonesian telecommunications sector in 1999 have their foundation
in Law No. 36/1999 (the ""New Telecom Law''), which replaced the old telecommunication law
No. 3/1989 (the ""Old Telecom Law'').
The law is followed by the Ministry of Communication release regarding principal license to enter
international telecommunication services business to TELKOM in 2003 and domestic long distance
telecommunication services business to INDOSAT in 2003 and local service to INDOSAT in 2002.
These licenses are aimed to establish full service providers companies. Although the Company does not
expect direct competition in its core business in 2001, in the long run the Company may have direct
competition from INDOSAT. The Company cannot predict the extent of such competition may aÅect
the Company Ñnancial performance in the long run.
26
Administration of the Telecommunication Industry
The legal framework for the telecommunications industry is based on speciÑc laws, government
regulations and ministerial decrees enacted and issued from time to time. MOC is responsible for the
overall supervision and regulation of the industry. Within the Ministry various directorates and bureaus
carry out speciÑc regulatory duties. The Directorate General of Post and Telecommunications (DGPT),
which is headed by a Director General, regulates the telecommunications industry in Indonesia,
including granting licences, frequency management, standardization, and tariÅ setting. Major policy
and management decisions by the Company that aÅect national telecommunications development may
require consultation with, or the approval of the MOC.
Telecommunications Law
On September 8, 1999, the Government enacted a New Telecom Law No. 36/1999, which became
eÅective September 8, 2000, to replace the Old Telecom Law No. 3/1989. The new Telecom law
provides key guidelines for industry reforms, including industry liberalization, provision of new
entrants and an increase in the industry's competitive structure. It eliminates the concept of organizing
entities, thus ending TELKOM's status as organizing entities for the industry. However, based on prior
decrees creating certain exclusivity entitlements, TELKOM will retain its status as telecommunications
operators subject to fulÑlment of any licensing requirement under the law.
Pursuant to the new Telecom law, telecommunications operations are classiÑed into three service
categories: (i) telecommunication network operations, (ii) telecommunications services operations,
and (iii) Special Telecommunications Operations. Under these categories, telecommunications network
operation and/or provision of telecommunications services may be carried out by legal entity
established for the purpose on the basis of applicable regulation. These legal entities include State-
Owned Enterprise (BUMN), Regional State-Owned Enterprise (BUMD), Private Owned Companies,
and Cooperatives.
In implementing its business, a telecommunication network provider may conduct telecommunica-
tions services, while a telecommunication service provider in operating its telecommunication services
can use its own network or rent a telecommunications network owned by other telecommunication
network provider. On the other hand, individuals, government institutions, special agencies, and legal
entities may conduct special telecommunications operations. License for special telecommunication
operations is given only for the purpose of self-interest, national defence and security interest, and
broadcasting. Under the New Telecom Law, new players may enter the telecommunication business
without the cooperation of an organizing body, after obtaining a license from the Minister of
Communication (MOC).
TariÅ for usage of the telecommunications network and/or telecommunications services are
determined by the providers based on the tariÅ category, structure and formula set by the government.
The formula is determined based on the provider cost component.
Every telecommunications network operator, by request, is obligated/entitled to interconnect its
network with another network operator. The implementation of this obligation shall be guided by the
following principles: (i) EÇcient Source Usage, (ii) Telecommunication System and Equipment
Compatibility, (iii) Quality Service Improvement, and (iv) Fair Competition. This means that
operators that interconnect with TELKOM's network are required to enter into an agreement with
TELKOM establishing settlement procedures for the interconnection payments.
Under the new law, each licensed provider is obliged to pay license right to Government as a
percentage of revenue.
The new telecommunications law Number 36 of 1999 does not terminate the existing exclusive
rights of TELKOM. However the new telecommunications law allows early termination of the rights
subject to compensation agreement between TELKOM, and the government.
27
On August 1st, 2000, the Government, through the Director General of Post and Telecommunica-
tions (DGPT), announced Release Number o5/HMS/JP/VIII/2000, dated August 1st, 2000 and the
correction thereto No. 1718/UM/VII/2000 dated August 2nd, 2000, which contains early termination of
TELKOM exclusive rights for local in August 2002 and domestic long-distance telecommunication
services in August 2003. This Decree marks the end of the monopoly era. Therefore, the Company no
longer remains the sole domestic telecommunications services provider in Indonesia.
The following table sets forth comparative matrix of the previous and new telecommunications
law:
Description Law 3/1989 Law 36/1999
Operator The Government through Regional-owned Enterprises, state-

Organizing Body owned companies, private and
cooperatives
Service Category Basic and Non-Basic Services, and Telecommunication Network,
Special Telecommunications Telecommunication Services, and
Special Telecommunication
Cooperation JVC, KSO, and Management Pure Business Decision
Framework Contract
Business Mode Through Cooperation with Based on Business Viability
Organizing Body
Exclusivity Monopoly and Duopoly Exclusivity Exclusivity is maintained as
scheduled, Acceleration is possible
by application of compensation
TariÅ Determined by the Government Determined by the Operators based
on formula determined by the
Government
Regulator Government Government assisted by an
Independent Body (to be
established)
Currently, TELKOM, is not required to hold a license in order to provide telecommunications
services, other than licenses allocating frequency bands. Joint Operating Schemes also do not require
licenses for providing telecommunications services as TELKOM is deemed to remain the operator of
such businesses. Joint venture companies, however, do require licenses.
The new telecom law only outlined substantial and principal topics. Its implementation will be
conducted through several Government Decree promulgated there under.
On September 8, 2000, two implementing regulations of the New Telecom Law were issued,
named Government Regulation No. 52 on Operation of Telecommunications and Government Regula-
tion No. 53 on Utilization of Radio Frequency Spectrum and Satellite Orbit. The MoC and DGPT are
still in the process of Ñnalizing various other ministerial decrees, which are intended to implement
other aspects of the new telecom law.
On January 16, 2001, Government issued a new rule of National Fundamental Technical Plan
(National FTP) through Ministerial Decree No. 4/2001. The National FTP set numerous technical plans
that regulate technical aspect for both telecommunication network and service providers. It consists of
(i) numbering plan, (ii) interconnection plan, (iii) charging plan, (iv) routing plan, (v) transmission
plan, (vi) signalling plan, (vii) switching plan, (viii) synchronization plan, (ix) subscriber access plan,
(x) network management plan, (xi) technical availability plan, and (xii) service operation plan.
Government Policy
The Government's development policies used to be set forth in consecutive Ñve-year development
plans known as ""Repelitas.'' Each Repelita assesses the current level of economic progress, establishes
28
priorities for the next Ñve-year plan and realigns those previously made for future Repelitas. The
Company takes into account the Government's targets when setting its own development plans,
although it is not formally obligated to meet such targets.
In 1995, the Government set the long-term targets for local exchange capacity, local exchange
capacity per 100 inhabitants and call completion rates for Repelitas VI through Repelita X, as stated in
the following table:
Repelita (Year Ended March 31)
Development Targets VI VII VIII IX X
(1999) (2004) (2009) (2014) (2019)
Local exchange capacity (millions of lines) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10.5 19.0 29.0 42.0 60.7
Local exchange capacity per 100 inhabitants(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.1 8.7 12.4 17.1 23.6
Call completion rate(2)
Local(%) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 65 70 75 80 90
Domestic long distance(%) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 45 50 55 60 80
(1) Referred to in the Repelita as line penetration.

(2) Repelitas use the terminology ""successful call ratio,'' TELKOM has interpreted this to mean ASR and, with the MTPT's
consent, has reported only ASR data to the MTPT since 1991.
In view of the Indonesian economic turmoil, the Government did not announce detailed plans for
Repelita VII, which may result in amendments to the long-term plan shown above. Since there are no
detail plans from the Government, TELKOM arranges its own long-term plans, internally known as
Corporate Strategic Scenario (CSS).
The following table gives certain basic measures of the development of the Indonesian domestic
telecommunications network.
Compound
Annual
Growth
Year Ended December 31, Rate(%)
1996 1997 1998 1999 2000 1996-2000
Lines in serviceÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,186,030 4,982,466 5,571,644 6,080,193 6,662,605 12.3

Population (millions)(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 198.3 201.4 204.4 207.4 216.8 2.3
Lines in service per 100
InhabitantsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.11 2.47 2.73 2.93 3.07 9.8
Call completion rate(%)(2)
Local ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 57.90 60.43 68.07 70.63 72.97 6.0
Domestic long distance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 53.21 56.46 62.04 62.98 65.82 5.5
Fault rate(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1.55 1.14 1.10 0.62 1.33 3.8
Digitalization(%)(4)
Switching
Local exchanges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 96 99 99 100 100 1.0
Trunk exchanges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100 100 100 100 100 0.0
Transmission ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 85.0 92 93.8 95.6 96.6 3.2
Number of public telephones ÏÏÏÏÏÏÏÏÏÏÏÏÏ 134,542 166,724 216,651 269,242 345,307 26.6
Domestic call volume (billions of pulses) ÏÏ 35.3 42.1 45.9 47.3 52.9 10.6
Number of mobile cellular subscribers ÏÏÏÏÏ 562,517 916,173 1,065,820 2,220,969 3,669,327 59.8
Mobile cellular subscribers per 1000
InhabitantsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.84 4.55 5.21 10.71 16.92 56.3
(1) Source: Indonesian Central Bureau of Statistics.

(2) As measured by ASR.
(3) Faults per 100 lines in service per month.
(4) Expressed as a percentage of switching or transmission capacity, as applicable.
29
As of December 31, 2000, the line penetration rate was 5.7% and 2.0% for Non-KSO Division and
KSO Division, respectively, and 3.1% nationally. The following table presents the penetration rate for
each regional division:
Division I Division II Division III Division IV Division V Division VI Division VII Total
LISÏÏÏÏÏÏÏÏÏ 897,323 2,412,221 639,913 579,647 1,198,142 302,948 632,411 6,662,605

Population ÏÏ 45,436,572 24,523,000 25,442,000 39,178,407 38,336,320 12,378,174 31,520,936 216,815,409
DensityÏÏÏÏÏ 1.97 9.84 2.52 1.48 3.13 2.45 2.01 3.07
As of December 31, 2000, approximately 49.23% of total lines in service were in the major
metropolitan areas of Jakarta, Surabaya, Semarang, Bandung, Medan, and Denpasar. The following
table presents the number of line in service among the 6 major metropolitan areas:
Jakarta Surabaya Semarang Bandung Medan Denpasar Total
LISÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,672,351 668,220 182,073 371,653 213,135 172,445 3,279,877

Population ÏÏÏÏÏÏÏÏÏÏÏ 8,384,853 2,558,816 1,345,065 2,141,837 1,899,327 522,785 16,852,683
Density ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19.9 26.1 13.5 17.4 11.2 33.0 19.5
Competition
In previous years, consistent with its emphasis on national economic development, the Govern-
ment, through the Ministry of Tourism Post and Telecommunication (MTPT), has articulated the
policy of gradually liberalizing the telecommunication industry. In keeping with this policy, the
Government has fostered the development of a limited competitive environment in certain of the
Company's business, including mobile and Ñxed cellular telecommunications and non-basic services.
This liberalization has taken the form of requiring TELKOM, as the domestic sector's organizing body,
to cooperate with investors in the provision of basic telecommunications services.
With eÅect from January 1, 1996, the MTPT granted TELKOM (i) the exclusive right to provide
local Ñxed wire line and Ñxed wireless telecommunication services nationwide, including services
provided for and on behalf of TELKOM pursuant to joint operating schemes, for a minimum of 15 years
and (ii) the exclusive right to provide domestic long distance telecommunications services nationwide
for a minimum of ten years. However as a result of certain changes to the interconnection regime and
the tariÅ structure initially introduced in November 1996, the Company expects to face competition,
which may include price competition, from cellular operators for the provision of long distance
services. Under the current interconnection regime, long distance calls originating or terminating on
mobile cellular networks are no longer required to interconnect with the PSTN, and TELKOM and the
KSO Units do not receive interconnection charges for long distance calls, which do not interconnect
with the PSTN. In addition, in 1997 the MTPT announced that the tariÅs set by the MTPT are
maximum tariÅs, thus permitting all service providers (including TELKOM and the cellular operators)
to discount tariÅs for local, long distance calls, installation and monthly charges. As a result, the
Company may face price competition from cellular operators for the provision of long distance services.
Currently, seven companies hold licenses for the provision of PCN/DCS 1800 services in various
region throughout Indonesia, and all the three existing nationwide GSM 900 MHz had received a
license to extend their operating frequency to 1800 Mhz. The company does anticipate that the
introduction of further cellular operators may signiÑcantly increase competition among cellular
operators generally and, to some extent, increase competition to the Ñxed line services. Such
competition could have a negative material impact on the Company's growth potential and Ñnancial
performance.
TELKOM's exclusivity does not include telecommunication services provided through private
networks. Certain large corporations and Ñnancial institutions have had specialized service require-
ments and pricing benchmarks which TELKOM historically was not able to satisfy. These entities have
therefore constructed private networks in order to service their own business needs. Government
regulations provide that, subject to limited exceptions, the use of private networks is restricted to
internal use by a closed user group and cannot be connected to the PSTN. The Company believes that
30
extension of such closed user group to others or expansion of private networks will be limited as a
result of: (i) the high expense of maintaining a private network, (ii) Governmental enforcement of
restrictions on the number of users in a closed-user group and on the ability of private networks to
interconnect with the PSTN, and (iii) eÅorts by the Company to increase the quality and reliability of
the PSTN and to provide the types of services necessary to address the needs of the business sector in
Indonesia.
The New Telecom Law allows for the early termination of the existing rights of TELKOM, subject
to its compensation agreement between the Government and TELKOM.
On August 1st, 2000, the Government, through the Director General of Post and Telecommunica-
tions (DGPT), announced Release Number o5/HMS/JP/VIII/2000, dated August 1st, 2000, and the
correction thereto No. 1718/UM/VII/2000 dated August 2nd, 2000, which contains early termination of
TELKOM exclusive rights for local and domestic long-distance telecommunication services. This Decree
marks the end of the monopoly era. Therefore, the Company no longer remains the sole domestic
telecommunications services provider in Indonesia.
In line with the Government's policy to rescind TELKOM's exclusivity right and establish
competitive industry, the Government shall give TELKOM permanent license for international direct
dialling in August 2003. While INDOSAT shall be given permanent license for local services in
August 2002 and domestic long-distance services in August 2003.
As consequence of the organizing entity concept under the Old Telecom Law, TELKOM and
Indosat have joint-ownership in most telecommunications companies in Indonesia. The Blueprint calls
for further progressive elimination of these complex shareholdings to promote competition and avoid
any actual or potential conÖicts of interest in a more competitive telecommunication environment.
TariÅ Regime
The new Telecom law No. 36/1999 stated that tariÅ structure for the operation of telecommunica-
tions network and/or telecommunications services are regulated through government regulations. In
addition it also delivers the decision of the tariÅ amount for the operation of telecommunications
network and/or telecommunications services to the operator based on a formula regulated by the
government.
Under the Government Regulation No. 52/2000, tariÅ category is classiÑed into tariÅ for telecom-
munication network provider, covering tariÅ for leased network and interconnection, and tariÅ for
telecommunication service provider, which also includes retail tariÅ for Ñxed line and mobile services.
TariÅ structure for telecommunication network provider consists of access charge, usage charge and
charge related to the universal service obligation, whereas tariÅ structure for retail Ñxed line services
consists of installation charge, monthly charge, usage charge and charges related to additional facilities
delivered. TariÅ structure for retail mobile services consists of airtime tariÅ, roaming tariÅ and tariÅ for
multimedia services.
The Government is currently in the process of formulating a new Ministerial Decree in the
implementation of the new tariÅ policy. During this transition period, telecommunication operators use
the current tariÅ regime based on Ministerial Decree issued prior to New Telecom Law No. 36/1999.
TariÅ for Providing Telecommunication Service

Fixed Line Domestic Telephone TariÅs.
On October 23, 1995, the Government issued a Price Cap TariÅ Decree based on a formula set forth
in general terms and calculated by reference to the Indonesian Consumer Price Index (CPI) for the
preceding year, as published by the Indonesian Central Bureau of Statistics. The price cap applies to
monthly subscription and local and domestic long distance usage charges. In calculating the adjustment
to these prices, each Service is weighted in proportion to the contribution it made to operating revenues
31
from all Services. The weighted average increase in prices charged for the Services for any year must be
equal to or less than a speciÑed percentage, which is equal to the CPI minus an eÇciency factor (the
""X-factor''). In determining the X-factor, the Government is to take consideration improvements in the
cost eÇciency of the Services resulting from technological improvements, the interests of the aÅected
telecommunications operators and the purchasing power of the Subscribers to the Services.
The following table set forth the tariÅs for Domestic Fixed Telephone Services, for the years 1999
and 2000. There were no tariÅ changes within the year 2000.
Access charges(1) Business Residential Social
(in Rupiah) (in Rupiah) (in Rupiah)
Installation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 175,000 Ì 450,000 75,000 Ì 295,000 50,000 Ì 205,000
Monthly Subscription ÏÏÏÏ 26,100 Ì 39,100 14,500 Ì 22,900 10,600 Ì 15,700 (maximum tariÅ)
Beginning
March 1, 1999
Price Pulse
Usage charges(2) Per Minute(3) Duration
(in Rupiah)
(Ñxed tariÅ)
Local(4)
up to 20 km ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 56 3 min
20-30 km ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 84 2 min
Over 30 km ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,002 10 sec
Domestic long Distance
0-20 km ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 56 3 min
20-30 km ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 84 2 min
30-100 km ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,150 7 sec
100-200 km ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,150 7 sec
500-1000 km ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,010 4 sec
Over 1000 km ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,010 4 sec
(1) The range in prices is a function of diÅerentiated prices for certain geographic categories, which have diÅerent tariÅ levels
based on certain network and social-economic factors.
(2) Usage tariÅs are diÅerentiated by time of day, Sundays and public holidays, varying between 100-125% (for local) and 25%-
125% (for domestic long distance) of the stated ""base'' rate; tariÅs illustrated above reÖect per minute charges at 100%.
(3) Price per minute calculated by TELKOM based on pulse duration and price per pulse. The minimum peak hour duration for
peak hour local calls is 1.5 minutes.
(4) Only for Regional Division II (Jakarta) and Bandung area (area code 022), the pulse duration for usage charge for local call
H 30 km at 100% tariÅ is 2 min (or price per minute • 84).
On November 10, 2000, DGPT issued a guidance letter No. 2775/Dittel/XI/2000, setting a plan to
increase retail Ñxed line domestic tariÅ with total increase of 45.49% in 3 years, comprising a gradual
increase of 21.67% in 2001, 15.60% in 2002, and 8.22% in 2003. Implementation of this tariÅ adjustment is
subject to Parliament discussion and MoC decree.
Mobile Cellular TariÅ
Structure of Mobile Cellular TariÅ consists of activation, monthly subscription and usage charges.
The Government stipulates the Mobile Cellular TariÅ as maximum tariÅ. Monthly subscription charge
includes also the fee related to the frequency usage of the outstation, while the usage charge consists of
Air Time charge and a charge related to the type of conversation, for example local or DLD. The
following table set forth the tariÅs for Mobile Cellular TariÅ, beginning February 25, 1998.
32
MOBILE CELLULAR TARIFF (MAXIMUM TARIFF)
Activation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 200,000.00
Monthly Charge (including frequency charge) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 65,000.00/month
Usage Charge:
Air Time ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 325.00/minute
Roaming ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 1,000.00/call
Other Services TariÅ

Currently, the Government sets tariÅs for other services, such as telex, telegram, value added
services, and multimedia services. Under the New Telecom Law, tariÅ amount for the operation of
other services shall be determined by the operators, based on a formula regulated by the Government.
TariÅ for Providing Telecommunication Network

Interconnection Arrangement
The Fundamental Technical Plan (FTP) sets forth the technical requirements and routing plan for
interconnection of the networks of various telecommunications operators among themselves and with
the Public Switched Telephone Network (PSTN). Under the FTP, mobile and Ñxed cellular operators
are permitted to interconnect with the PSTN for access to the PSTN and other networks, such as
international gateways and the network of other cellular operators. In addition, cellular operators may
interconnect directly with such other networks without traversing the PSTN. For each interconnection
with the PSTN, TELKOM or the relevant KSO Unit receives the applicable interconnection charge set
forth in the Interconnection TariÅ Decree.
Cellular and Fixed Line Interconnection.

For local calls from a mobile cellular network to the PSTN, the cellular operator is required to pay
TELKOM 50% of the prevailing tariÅ for local pulse per minute. For local calls from the PSTN to a
cellular network, TELKOM collects a per minute charge of 50% of the prevailing applicable local call
tariÅ plus an airtime charge of Rp 325.00 per minute. The airtime charge must be remitted by TELKOM
to the cellular operator. The Interconnection Decree, eÅective April 1, 1998, indicates that it is possible
for long distance calls to be carried by more than one cellular network. Pursuant to the Decree, for DLD
calls which originate on the PSTN, TELKOM is entitled to retain a portion of the prevailing DLD tariÅ,
which ranges from 40% of the tariÅ, in cases where the entire DLD portion is carried by one cellular
operator and delivered to another, up to 85% of the tariÅ, in cases where the entire DLD portion is
carried by the PSTN. For domestic long distance calls which originate from a cellular operator,
TELKOM is entitled to retain a portion of the prevailing DLD tariÅ, which ranges from 25% where the
entire DLD portion is carried by a cellular operator and the call is delivered to a cellular subscriber, up
to 85%, in cases where the entire DLD portion is carried by the PSTN and the call is delivered to a
PSTN subscriber.
Fixed cellular networks may interconnect with the PSTN at the local exchange and the DLD
Network levels, and may interconnect directly with the international gateways.
Currently, Ratelindo is the only Ñxed cellular service provider in Indonesia, apart from TELKOM
and the KSO Unit. Local calls between PSTN and Ratelindo's network are operated on a ""sender keep
all'' basis. For DLD calls that originate on Ratelindo's network and transit the PSTN, TELKOM is to
receive 35% of Ratelindo's revenues from such calls. For DLD calls that originate on the PSTN,
TELKOM is to retain 65% of its revenue from such calls.
Fixed Wireline Interconnection.

Since September 1, 1998, TELKOM has been receiving a share of Batam Bintan Telekomunikasi
(BBT)'s revenue for each successful call that interconnects with the PSTN. Under the interconnection
33
agreement, TELKOM is to receive 75% of BBT's revenues from domestic long distance calls that
originate and terminate at the PSTN. For local calls between the PSTN and BBT, revenues are shared
on a sender keep all basis. For calls originating from BBT and terminating at a mobile cellular network
which transits the PSTN, TELKOM is to receive 50% of 50% of the prevailing local call tariÅs for local
calls and 60% of BBT's revenue from DLD calls. For DLD calls, which originate from BBT terminating at
a Ñxed cellular network and transiting the PSTN, TELKOM is to receive 50% of BBT's revenue. In case
of international calls, BBT is to receive 50% of TELKOM's interconnection revenue (access and usage),
for all incoming and outgoing international calls from and to BBT, which transit through TELKOM.
International Interconnection.
Interconnection for international calls consists of access charge, usage charge and a charge for
Universal Service Obligation (USO).
The following table sets forth the international interconnection tariÅ, eÅective as of December 1,
1998:
Description New TariÅ
Access Charge ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 850/call

Usage Charge ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 550/paid minutes
USO ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 750/call
Leased line tariÅ

Currently, government determines tariÅs for leased line. Of this tariÅ, the most signiÑcant to
TELKOM is the tariÅ for low and high-speed leased lines, which varies according to the type of
subscriber, speed and type of the line, and distance covered by the line. EÅective January 1, 1997, the
Government decreased the tariÅ for leased line by an average of 52%. Leased line tariÅs for other
telecommunications operators and Government bodies were further reduced by up to 30%, starting
from January 1, 1998.
Under the new law, the operators shall determine tariÅ amount for the operation of leased line
services, based on a formula regulated by the Government.
Universal Service Obligation

Under the New Telecom Law, all telecommunications network operators and service providers are
bound by a universal service obligation (""USO''), which requires provision of telecommunications
facilities and infrastructure or other compensation to all operators. The local network provider will be
responsible for network installation in the USO areas. Thereafter, cost arising from providing networks
in the USO areas will be passed onto other network and service providers that send traÇc to the
recipient network providers, in the form of USO fees. A speciÑc regulation is expected to be issued in
order to implement this USO.
Relationship with the Government

State of the Republic of Indonesia as Shareholder
The State of the Republic of Indonesia currently holds 66.19% of TELKOM's Common Stock and
the Series A share (the ""Dwiwarna Share''), which has special voting rights. The Government's rights
with respect to the Dwiwarna Share will not terminate unless the Articles of Association of the
Company are amended, which would require the consent of the Government as holder of such a Share.
It is the policy of the Company not to enter into transactions with aÇliates unless the terms thereof
are no less favorable to the Company than those, which could be obtained by the Company on an
arm's-length basis from an unaÇliated third party. The Government has advised the Company that the
34
MOF, in its capacity as controlling shareholder of the Company, will not cause the Company to enter
into transactions with other entities under its control unless the terms thereof are consistent with the
Company's policy set forth in the preceding sentence.
Under regulations of Badan Pengawas Pasar Modal (""BAPEPAM''), Indonesia's capital markets
supervisory agency, because the Company is listed on Indonesian stock exchanges, any transaction in
which there is a conÖict of interest (as deÑned below) must be approved by a majority of the holders of
shares of common stock who do not have a conÖict of interest in the proposed transaction, unless the
conÖict existed before the Company was listed and was fully disclosed in the oÅering documents. A
conÖict of interest is deÑned in BAPEPAM regulations as the diÅerence between the common interests
of the Company and its shareholders, and the personal economic interests of the members of the board
of commissioners, board of directors or principal shareholders (a holder of 20% or more of the issued
shares), jointly or separately. A conÖict of interest also exists when members of the board of
commissioners, board of directors or a principal shareholder of the Company is involved in a
transaction in which their personal interests may be in conÖict with the interest of the Company.
BAPEPAM has power to enforce this rule; shareholders of the Company may also be entitled to seek
enforcement or bring enforcement action based on this rule.
Government as Regulator
The Government regulates the telecommunications sector through the MOC. In particular, the
Ministry has authority to issue decrees implementing laws, which are typically broad in scope, thereby
giving the Ministry considerable latitude. Pursuant to such decrees, the Ministry deÑnes the scope of
TELKOM's exclusivity, formulates and approves TELKOM's tariÅs, determines TELKOM's USO and
otherwise controls many factors aÅecting TELKOM's competitive position, operations and Ñnancial
condition. Through the DGPT, the Government regulates the frequency bandwidth allocation, and
TELKOM must obtain a license from the Directorate for each of its services utilizing frequency
bandwidths. The Company and other operators are also required to pay radio frequency usage. The
Government also requires all operators, including TELKOM, to pay a concession fee of 1% of its
collected operating revenues. The concession fee is payable by all telecommunications operators in
Indonesia, whether private or Government-owned. The Company also is required to pay to the
Government radio frequency usage charges in connection with radio transmission used in providing
telecommunications services. The fee is applicable to all users of radio frequency in Indonesia and is
calculated based on the location and number of channels, base stations and repeater towers. The MOC
as regulator has the authority to grant new licenses for the establishment of new joint ventures and
other arrangements, particularly in telecommunications sector.
Government as Lender
As of December 31, 2000, the Government has sub-loaned borrowings from foreign lenders in the
total amount of Rp 10,364.8 billion. The Government will receive from TELKOM interest and principal
repayment, the amount of which will be transferred to the respective lenders. At the end of
December 2000, of the total loan outstanding 56.1% was in foreign currencies and the remaining 43.9%
was rupiah denominated. Interest payment will be paid in Öoating rate between 8.45% and 14.53%, and
in Ñxed rate between 3.10% and 13.25%.
Government as Customer
The Government purchases services from the Company on a commercial basis. Government
entities, in the aggregate, constitute the largest user of the Company's services. The Company,
however, deals with the various departments and agencies of the Government as separate customers,
and the provision of services to any department or agency does not constitute a material part of
TELKOM's revenues.
35
C. Organizational structure
President Director
Director of Director of Director of Finance Director of

Planning and Operation and Human Resources
Technology Marketing Development
Business Corporate
Development Secretary
Group
Internal
Auditor
Development Research on Regional Network Multimedia Atelier Training Property Information

Division Information Divisions Division Division Division Division Division System
Technology Division
Division
Foundations Subsidiaries
D. Property, plant and equipment

TELKOM currently possesses over 3,000 properties. Titles to such properties range from 20 to
30 years extensions, up to an unlimited time for certain land use titles where use is restricted to the
operation of telecommunications. In addition, the Company leases additional properties, most of which
are from state-owned companies under the purview of the Ministry of Forestry. Most of the Company's
sites are related directly to its telecommunications operations and are used for network equipment of
various types, such as exchanges, transmission stations and microwave radio equipment. The Company
holds registered titles for the majority of its properties and has submitted or is in the process of
submitting applications for the remainder. None of the Company's properties is mortgaged or
otherwise encumbered.
At December 31, 2000, all property, plant and equipment, except land, were insured against Ñre,
theft, and other possible risks for Rp 16,137,128 million and an additional coverage for Palapa B4 and
Telkom I Satellite for U.S.$83,870.
Item 5: Operating and Financial Review and Prospects

The following discussion is based on the Consolidated Financial Statements included elsewhere in
this Annual Report. Such Consolidated Financial Statements are prepared in accordance with Indone-
sian GAAP, which diÅers in certain respects from U.S. GAAP. See ""Notes 43 and 44 of the Company's
Consolidated Financial Statements''.
36
A. Operating Result
Year ended December 31
1998 1999 2000
Rp (billion) Rp (billion) Rp (billion)
Income and Expense Items
Operating revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,600.0 7,790.2 9,375.7
Operating expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,000.3 4,846.7 5,338.4
Operating incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,599.7 2,943.5 4,037.3
Other income (expense)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,175.3) 19.3 (578.9)
Tax expenseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 255.8 777.0 906.2
Minority interestÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0 13.3 13.2
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,168.7 2,172.3 2,539.0
Operating margin ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39.4 37.8 43.1
Year Ended December 31, 2000 compared to Year Ended December 31, 1999.
General
For the year 2000, TELKOM recorded net income of Rp 2,539.0 billion or an increase of 16.88%
compared to the previous year of Rp 2,172.3 billion. The increase was attributed to the higher growth of
operating revenues compared to the growth of operating expenses, and the decrease in interest
expense. This resulted in earning per share (EPS) of Rp 251.89 in 2000 compared to Rp 225.24 in 1999.
For the year 2000, TELKOM reported operating income of Rp 4,037.3 billion, an increase of 37.16%
compared to Rp 2,943.5 billion in 1999. While other income (expense), tax expense and minority
interest and net income of subsidiary in 2000 were Rp 578.9 billion, Rp 906.2 billion and Rp 13.2 billion
respectively. These resulted in net income of Rp 2,539.0 billion in 2000, or an increase of 16.9% from
Rp 2,172.3 billion in 1999.
Operating Revenues
Compared to the previous year, total operating revenues increased by 20.4% from
Rp 7,790.2 billion in 1999 to Rp 9,375.7 billion. The main contributor to total operating revenues were
telephone revenues (55.23%), followed by revenues under Joint Operation Scheme (24.18%), intercon-
nection revenues (11.96%), and revenues from other telecommunications services (8.63%).
Telephone Revenues
Telephone revenues consists of revenues from local and domestic long distance usage, monthly
subscription charges, installation charges, pay phone, and other telephone services. For the year ended
December 31, 2000, total telephone revenues grew by 14.33% from Rp 4,528.9 billion in 1999 to
Rp 5,177.9 billion in 2000. The increase in telephone revenues resulted from: (i) the growth of 14.74% in
local and domestic long distance, from Rp 3,570.9 billion in 1999 to Rp 4,097.1 billion in 2000,
(ii) monthly subscription charges of 11.05% from Rp 799.1 billion in 1999 to Rp 887.4 billion in 2000,
and (iii) installation charges of 10.40% from Rp 68.3 billion in 1999 to Rp 75.4 billion in 2000.
In the year ended December 31, 2000, an additional 506,347 subscribers connected to the
Company's network, an increase of 11% over the net growth of 455,958 subscribers achieved in the
previous year. Net subscribers growth is the amount of gross additional subscribers minus the number
of disconnected subscribers.
During the Ñscal year ended December 31, 2000, the Company recorded an increase of 5.3% in
telephone revenues per average subscribers (excluding revenue under Joint Operating Scheme) from
Rp 1.51 million in 1999 to Rp 1.59 million in 2000.
Phone card as part of telephone revenues recorded a proÑt of Rp 34.4 billion in 2000 compared to a
loss of Rp 8.6 billion in 1999.
37
Revenues under Joint Operation Scheme
The revenues under Joint Operation Scheme in 2000 increased by 35.18% from Rp 1,677.2 billion in
1999 to Rp 2,267.2 billion in 2000. This growth was mainly due to the 7.1% increase in MTR from
Rp 1,452.9 billion in 1999 to Rp 1,556.7 billion in 2000, and the 232.6% increase in Distributable
TELKOM Revenue (DTR) from Rp 209.0 billion in 1999 to Rp 695.1 billion in 2000. Amortized revenues
representing the amortization of the initial investor payments remained unchanged at Rp 15.3 billion.
The DTR increase was primarily a result of the change in DTR sharing percentage from 90% (KSO
Investor) : 10% (TELKOM) to 70% (KSO Investor) : 30% (TELKOM) since January 2000.
Interconnection Revenues
Interconnection revenues increased by 25.7% from Rp 892.1 billion in 1999 to Rp 1,121.5 billion in
2000. Contributing to the interconnection revenues were Rp 782.6 billion from mobile cellular, Rp 40.9
billion from Ñxed wireless, Rp 14.9 billion from Ñxed wire line interconnection, and Rp 283.1 billion
from international service interconnection. The Company recorded a growth in cellular traÇc, which
interconnects with TELKOM's network from 2,432.7 million paid minutes in 1999 to 3,893.3 million paid
minutes in 2000.
Revenues from international interconnection payments decreased by 8.9% from Rp 311.7 billion in
1999 to Rp 284.0 billion in 2000, and revenues from cellular interconnection payments increased by
8.5% from Rp 545.1 billion in 1999 to Rp 591.2 billion in 2000.
Revenues from Other Telecommunications Services

Revenues from other telecommunications services increased by 16.9% from Rp 692.0 billion in 1999
to Rp 809.2 billion in 2000. This increase resulted primarily from an 84.2% increase in multimedia
services from Rp 35.4 billion in 1999 to Rp 65.2 billion in 2000 and from a 92.9% increase in leased
channel from Rp 100.5 billion in 1999 to Rp 193.9 billion in 2000.
Operating Expenses
Operating expenses increased by 10.1% from Rp 4,846.7 billion in 1999 to Rp 5,338.4 billion in 2000.
The operating expenses consist of depreciation, personnel, operations, maintenance and telecommuni-
cations services, general and administrative, and marketing expenses.
Depreciation
Depreciation expenses decreased by 11.7% from Rp 2,363.6 billion in 1999 to Rp 2,087.8 billion in
2000. The decrease in depreciation expense was attributed to fully depreciated assets in 2000. In
addition, in 1999, the company recorded accelerated depreciation of the cable networks.
Personnel
In August 2000, the Company increased the employee basic salary by 50%. This policy impacted
the personnel expenses which increased by 30.2% from Rp 1,105.7 billion in 1999 to Rp 1,439.5 billion in
2000 and directly aÅected the income tax expense of employees paid by the Company which increased
by 57.3% from Rp 109.9 billion in 1999 to Rp 172.9 billion in 2000.
Operations, Maintenance and Telecommunications Services

Operations, maintenance and telecommunications service expenses increased by 22.8% from
Rp 822.0 billion in 1999 to Rp 1,009.5 billion in 2000. The increase was mainly due to the 53.3% increase
in kiosk phone commissions from Rp 242.9 billion in 1999 to Rp 372.3 billion in 2000, and the 35.8%
increase in electricity expense from Rp 75.8 billion in 1999 to Rp 102.9 billion in 2000.
38
The increase in kiosk commissions resulted from the growth of 53.74% in kiosk phones from
148,863 lines in 1999 to 228,862 lines in 2000, while the increase in electricity expense was due to the
increase in electricity tariÅs.
General and Administrative

General and administrative expenses increased by 40.6% from Rp 508.4 billion in 1999 to
Rp 715.0 billion in 2000. The major contributors to this increase were the 72.2% increase in provision for
doubtful accounts receivable and inventory from Rp 162.0 billion in 1999 to Rp 279.0 billion in 2000 due
to provisions for the account receivable of Komselindo, Mobisel, Metrosel, and MTR of KSO Regional
Division III. In addition, this increase was also caused by a 180.3% increase in research, development
and professional fees from Rp 22.8 billion in 1999 to Rp 63.9 billion in 2000 due to the Company's
financial advisory and legal consultant since September 2000.
Marketing
Marketing expenses increased by 84.3% from Rp 47.0 billion in 1999 to Rp 86.6 billion in 2000,
primarily due to the marketing promotion via TV broadcast programmes in 2000. Advertising and
promotion expense increased by 68.9% from Rp 44.1 billion in 1999 to Rp 74.5 billion in 2000.
Other Income (Expense)

During 2000, the Company recorded other expenses (net) of Rp 578.9 billion compared to other
income (net) of Rp 19.3 billion in 1999. This was largely due to the loss of foreign exchange
(net) resulting from the depreciation of the Rupiah in 2000, from a net gain of Rp 280.2 billion in 1999
to a net loss of Rp 1,064.2 billion in 2000. As of December 31, 2000 the exchange rate was
US$1 • Rp 9,625 compare to exchange rate as of December 31, 1999 US$1 • Rp 7,110.
Provision For Income Taxes

The provision for income taxes increased by Rp 129.2 billion or 16.6% from Rp 777.0 billion in 1999
to Rp 906.2 billion in 2000. The increase was largely attributed to the increase of the Company's taxable
income. See Note 26 to the Company's Consolidated Financial Statements.
Year Ended December 31, 1999 compared to Year Ended December 31, 1998
General
During 1999, TELKOM reported operating income of Rp 2,943.5 billion or an increase of 13.2%
compared to Rp 2,599.7 billion in 1998. While other income-net and provision for income tax in 1999
were Rp 19.3 billion and Rp 777.0 billion respectively. This resulted in net income of Rp 2,172.3 billion
in 1999, or an increase of 85.9% from Rp 1,168.7 billion in 1998.
Operating Revenues
During 1999, total operating revenues increased by 18.0% to Rp 7,790.2 billion from
Rp 6,600.0 billion in 1998. Total operating revenue comprises telephone revenue, revenue under Joint
Operation Scheme, interconnection revenues, and revenues from other telecommunications services.
Telephone
Telephone revenues increased 19.0% from Rp 3,805.2 billion in 1998 to Rp 4,528.9 billion in 1999.
Telephone revenue comprises revenues from usage charges for local and domestic long distance
telephone calls, installation charges, monthly subscription charges, and phone card revenues.
Local and Domestic Long Distance Usage. Revenues from local and domestic long distance calls
increased by 23.0% from Rp 2,902.6 billion in 1998 to Rp 3,570.9 billion in 1999. This revenue
39
contributed 45.8% of total operating revenue in 1999 compared to 44.0% in 1998. The increase in
revenue from local and domestic long distance was attributed to the growth of 8.0% in lines in service
during 1999, pulses production of 2.8%, and tariÅ increases of 15%. In addition, the Company believes
the growth was also attributed to the improvement of network quality as measured by successful call
ratios from 68.1% in 1998 to 72.0% in 1999 for local calls and 62.1% in 1998 to 64.0% in 1999 for domestic
long distance calls.
Local and domestic long distance usage as measured by pulses per average subscriber, excluding
public phones, decreased by 7.6% from 9,056 pulses per subscriber in 1998 to 8,372 in 1999. The
decrease was primarily a result of the larger proportion of lines in service in 1999 that were connected
to residential subscribers. The company believes that the local and domestic long distance usage may
increase if the lines in service and the usage of telecommunications services increase in line with the
improvement of economic and social conditions in Indonesia.
Monthly Subscription Charges. Revenues from monthly subscription charges increased by 16.9%
from Rp 683.3 billion in 1998 to Rp 799.1 billion in 1999, primarily as a result of the increase of 1.5%,
8.9%, and 7.4% for business, residential, and social subscribers lines respectively, compared to those in
1998.
Installation charges. Revenues from installation charges declined by 35.5% from Rp 105.9 billion in
1998 to Rp 68.3 billion in 1999. The primary factor causing this decrease was the reduced number of
additional lines in service in 1999 compared to 1998, and discounting of installation fees during 1999.
Phone cards. During 1999, TELKOM recorded a loss of Rp 8.6 billion from phone cards. This loss
was 309.5% larger compared to Rp 2.1 billion loss reported in 1998. This loss was mainly associated
with the transfer of the magnetic and chip phone card business back to the Company.
Revenues under Joint Operation Scheme

The revenue under Joint Operation Scheme in 1999 increased by 5.4% from Rp 1,591.5 billion in
1998 to Rp 1,677.2 billion in 1999. This growth was mainly due to the 1.4% increase in MTR from
Rp 1,433.4 billion in 1998 to Rp 1,452.9 billion in 1999 and the 46.4% increase in DTR from Rp 142.8
billion in 1998 to Rp 209.0 billion in 1999. Amortized revenue representing the amortization of the
initial investor payments remained unchanged at Rp 15.3 billion.
Interconnection
Interconnection revenues increased by 60.6% from Rp 555.5 billion in 1998 to Rp 892.1 billion in
1999. The increase principally resulted from the growth in cellular traÇc, which interconnects with the
PSTN, and 67% increase in international interconnection tariÅs, which was eÅective December 1, 1998.
Revenues from international interconnection payments increased by 54.7% from Rp 201.5 billion in
1998 to Rp 311.7 billion in 1999, and revenues from cellular interconnection payments increased by
60.5% from Rp 339.7 billion in 1998 to Rp 545.1 billion in 1999.
Other Telecommunications Services

Revenues from other telecommunications services increased by 6.8% from Rp 647.7 billion in 1998
to Rp 692.0 billion in 1999. This increase was largely attributed to the increase in revenues from satellite
transponder, revenues from revenue sharing, and multimedia revenues. Revenues from telex and
telegram services continued to decrease.
Satellite transponder. Revenues from satellite transponder leasing services increased by 3.6% from
Rp 208.3 billion in 1998 to Rp 215.8 billion in 1999. The increase was attributed to the increase in leasing
transponders, despite the decrease in number of customers from 28 customers as of December 31, 1998
to 18 customers as of December 31, 1999.
40
Revenue Sharing. Revenues from revenue sharing increased by 8.0% from Rp 285.2 billion in 1998
to Rp 308.1 billion in 1999. Revenue sharing includes the Company's share of revenues earned under
Ñxed line and mobile cellular PBHs as Well as the amortization of unearned income related to these
PBH arrangements. See Note 34 to the Company's Consolidated Financial Statements.
Leased lines. Revenue from leased line services decreased by 3.9% from Rp 104.6 billion in 1998 to
Rp 100.5 billion in 1999. The Company believes that the number of leased lines in service has growth
potential due to the needs of mobile cellular networks and other telecommunications providers with
respect to expanding their transmission infrastructure.
Multimedia. Revenue from multimedia increased by 43.9% from Rp 24.6 billion in 1998 to
Rp 35.4 billion in 1999.
Telex and Telegram revenues decreased by 22.5% from Rp 16.9 billion in 1998 to Rp 13.1 billion in
1999, in line with a continuing long-term trend of substitution by other services, such as facsimile and
multimedia.
Other. Revenues from other services increased by 132.9% from Rp 8.2 billion in 1998 to
Rp 19.1 billion in 1999. This increase was attributed to the growth in revenue from value added services
particularly from ISDN services.
Operating Expenses
Operating expenses increased by 21.2% from Rp 4,000.3 billion in 1998 to Rp 4,846.7 billion in 1999.
The operating expenses consist of depreciation, personnel, operations, maintenance and telecommuni-
cations services, general and administrative, and marketing expenses.
Depreciation
Depreciation expenses increased by 9.3% from Rp 2,162.0 billion in 1998 to Rp 2,363.6 billion in
1999. The increase in depreciation expense was largely due to the increase in new property, plant and
equipment being placed in service by TELKOM and accelerated depreciation of the cable networks. The
categories of property, plant and equipment with the most signiÑcant additions were the Company's
satellite and, earth station equipment (Rp 1,258.0 billion or 69.8% increase), cable network
(Rp 914.2 billion or 12.2% increase), and its transmission installation and equipment (Rp 649.4 billion
or 19.4% increase).
Personnel
Personnel expenses increased by 32.9% from Rp 831.8 billion in 1998 to Rp 1,105.7 billion in 1999.
The growth in personnel expenses in 1999 was primarily due to a 44.5% increase in employee salary
and allowance from Rp 359.4 billion in 1998 to Rp 519.4 billion in 1999, which resulted in the increase of
employee income tax amounting Rp 42.5 billion or 63.1% from Rp 67.4 billion to Rp 109.9 billion in
1999. In addition, net periodic pension cost increased by Rp 30.3 billion or 98.4% from Rp 30.8 billion in
1998 to Rp 61.1 billion in 1999.
Consistent with the practice of most state-owned companies, TELKOM pays the income tax
expense on behalf of its employees.
Operations, Maintenance and Telecommunications Services

Operations, maintenance and telecommunications service expenses increased by 63.9% from
Rp 501.4 billion in 1998 to Rp 822.0 billion in 1999. The increase was mainly due to the Rp 133.2 billion
or 1,402.1% increase in Y2K expenses from Rp 9.5 billion in 1998 to Rp 142.7 billion in 1999, the Rp 135.5
billion or 126.2% increase in kiosk commissions from Rp 107.4 billion in 1998 to Rp 242.9 billion in 1999,
and the Rp 35.1 billion or 18.3% increase in operation and maintenance expenses of telecommunications
equipment from Rp 192.3 billion in 1998 to Rp 227.4 billion in 1999.
41
General and Administrative
General and administrative expenses increased by 7.4% from Rp 473.5 billion in 1998 to Rp 508.4
billion in 1999. The major contributors to this increase were a Rp 64.8 billion or 67% increase in
provision for bad debts and inventory obsolescence from Rp 97.2 billion in 1998 to Rp 162.0 billion in
1999, a Rp 9.1 billion or 30.7% increase in travelling expenses from Rp 29.6 billion to Rp 38.7 billion, and
a Rp 7.2 billion or 47.7% increase in security and screening expenses from Rp 15.1 billion to Rp 22.3
billion.
These increases were partly oÅset by a reduction of professional fees from Rp 28.1 billion to
Rp 10.2 billion, and education, training and recruitment from Rp 131.0 billion in 1998 to Rp 98.2 billion
in 1999.
Marketing
Marketing expenses increased by 48.7% from Rp 31.6 billion in 1998 to Rp 47.0 billion in 1999,
primarily due to Rp 9.0 billion or a 37.5% increase in marketing advertising promotion expenses from
Rp 24.0 billion to Rp 33.0 billion, and Rp 6.5 billion or 85.5% increase in other marketing expenses from
Rp 7.6 billion in 1998 to Rp 14.1 billion in 1999.
Other Expenses (Income)

During 1999, the Company recorded other income (net) of Rp 19.3 billion compared to other
expenses of Rp 1,175.3 billion in 1998. This fundamental change was largely due to the Company
booking gains on foreign exchange of Rp 280.2 billion in 1999 compared to a loss of Rp 965.5 billion
1998, the increase in equity in net income of investees amounting to Rp 417.7 billion from Rp 7.1 billion
in 1998 to Rp 424.8 billion in 1999, Rp 2.9 billion or a 15.6% increase in interest income from Rp 595.2
billion in 1998 to Rp 688.1 billion in 1999. The increase in other income was partly oÅset by Rp 506.7
billion or a 51.7% increase in interest expense from Rp 980.7 billion to Rp 1,487.4 billion.
For consolidating purposes due to the increase in investment in PT. Infomedia Nusantara the
Company recorded net revenue amounting to Rp 31.7 billion in 1999 in other income.
Provision For Income Taxes

The provision for income taxes increased by Rp 521.2 billion or 203.8% from Rp 255.8 billion in
1998 to Rp 777.0 billion in 1999. The increase was largely attributed to the increase in the Company's
taxable income. See Note 26 to the Company's Consolidated Financial Statements.
Net Income
Net income increased by 85.9% from Rp 1,168.7 billion in 1998 to Rp 2,172.3 billion in 1999, for the
reasons discussed above.
B. Liquidity and Capital Resources

The major sources of Company's liquidity over the three years ended December 31, 2000, have
been cash generated from operations, cash received from the proceeds of time deposit maturities, and
proceeds from sale of property, plant, and equipment.
Cash generated from operating activities was Rp 3,589.5 billion in 1998, Rp 4,249.9 billion in 1999,
and Rp 4,957.1 billion in 2000. The increase from 1999 to 2000 was mainly due to the increase in
operating proÑt, favorable working capital movements, and the continuing impact of the consolidation
of Infomedia Nusantara, a subsidiary that TELKOM acquired in 1999 and owns a majority interest. The
increase from 1998 to 1999 was primarily due to an increase in operating proÑt, partly oÅset by
movements in working capital.
42
Net cash Öow from operating activities was used mainly to Ñnance capital expenditures, to repay
long-term debt, to Ñnance cash dividend payments, to purchase marketable securities and to placed in
time deposits.
The repayments of long-term debts were Rp 284.1 billion in 1998, Rp 610.0 billion in 1999, and
Rp 682.1 billion in 2000. The payments of dividends were Rp 448.6 billion in 1998, Rp 475.6 billion in
1999, and Rp 1,103.4 billion in 2000.
In 1998 the Company drew Rp 2,722.7 billion of committed loans from foreign lenders for investing
activities. The amount of Rp 972.5 billion in 1999 and Rp 580.6 billion in 2000, were used for the same
purpose. As a result the ratio of long-term debt to total long-term debt and equity was 44.6% in 1998,
41.1% in 1999, and 41.1% in 2000.
The following table set forth TELKOM's outstanding long-term debt as of December 31, 2000.
Currency Amount in Original Currency Rupiah Equivalent
U.S. DollarÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 432.86 million 4.187.91 billion

Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17.83 billion 1,502.80 billion
French Franc ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 192.28 million 264.23 billion
Netherlands Guilder ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19.82 million 81.11 billion
Swedish Krone ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 866 thousand 883 million
Deutsche Mark ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 40 thousand 184 million
Total (Rupiah Equivalent) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 6,037.12 billion
Rupiah ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 4,327.66 billion
Total (Rupiah Equivalent) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 10,364.78 billion
The implementation of prudent policies in cash management and loans from foreign lenders have
contributed to the increase of cash and cash equivalents and availability funds from foreign lenders at
the end of the years over the period of 1998-2000. As of December 31, 1998 cash and cash equivalents
was Rp 2,536.3 billion, while at the end of 1999 and 2000 cash and cash equivalents were Rp 3,597.5
billion and Rp 3,542.2 billion, respectively. The Company believes that it will able to fulÑl cash
requirements in its operation.
The following table set forth TELKOM's outstanding committed loans from foreign lenders as of
December 31, 2000.
Undisbursed
Currency Committed Amount Amount Drawn Amount
U.S. DollarÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 294.86 million 196.10 million 98.76 million

Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29.30 billion 23.37 billion 5.93 billion
French Franc ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 127.80 million 125.47 million 1.61 million
In addition, TELKOM has historically met its working capital and capital expenditure requirements
principally with cash Öows generated from operations and funds from multilateral and bilateral
international Ñnancial institutions (which TELKOM receives from the Government through an on-
going lending program). With these Ñnancing methods the Company has been able to fulÑl its required
funds, although since the IPO the Company has been relying only on undisbursed committed loans.
Assuming that the Company requires larger funds compared to the funds available from these sources,
the Company may seek funds from alternative sources, such as sales of common stock or issuance of
bonds. No assurance can be given that such alternative sources of funding will be available when
required.
InÖation
InÖation in Indonesia as measured by a consumer price index (CPI) which was 77.6%, 2.01%, and
9.35% in 1998, 1999, and 2000 respectively, according to the Indonesian Central Bureau of Statistics.
43
While the price cap tariÅ formula (CPI-X°Z) applicable to TELKOM's business is calculated by
reference to Indonesia's CPI, TELKOM is unable to determine whether and to what extent any increase
in Rupiah-denominated costs as a result of inÖation will be oÅset by any future tariÅ increase.
Accordingly, the Company's results of operations and Ñnancial condition could be signiÑcantly and
adversely aÅected by future inÖation.
C. Research and Development, Patents and Licenses, etc

TELKOM invests in improvements and additions to its facilities and in new services and
businesses, all of which it classiÑes as research and development. TELKOM expended approximately
Rp 12.3 billion, Rp 12.6 billion, and Rp 33.1 billion in 1998, 1999, and 2000 respectively, for research and
development. During 2000, the Company's Research on Information Technology Division (RisTI)
works in conjunction with the marketing department to develop projects having potential commercial
applications based on anticipated market demand and technological and economic feasibility.
With regard to the Company's new vision, RisTI implemented several projects which fall into three
general categories: (i) development of telecommunication technology, which consists of: Multimedia
City Plan Development (Jakarta and Surabaya), National Backbone Data Network, VoIP Technology
Assessment and Network Planning Project, WAP Program, Detail Design Tools Software Development
(for cable network planning), Virtual Phone, Virtual Internet, etc; (ii) telecommunication technology
analysis, such as: Network Analyzer for Telecommunication Fraud, Cable Implementation Quality
System (CIQD), and other new telephone design with a variety of features; and (iii) development of a
management system, which is aimed to develop new projects i.e.: web based customer care system
(using the brand name RisTIshop), new product developments which are integrated based on web
(on-line), e-government solutions, Telkom Information Center, BaliMoon Island Project, E-Service,
Knowledge Management, Royalty Development, and others.
D. Trend Information
Since 1997, Indonesia has been experiencing economic diÇculties due to unusually high exchange
rates, slowing down of economics activities, high unemployment, and lack of customer aÅordability.
High exchange rates have increased the Company's cost of funds, as well as the amount of debt to be
served, while the slowing down of economic activities has aÅected the growth of the Company's
subscribers and revenues.
In response to these economic events, the Government, through Minister of Communications, has
proposed to the Parliament (DPR) on increase of telephone tariÅs by 45% to be implemented within
three years beginning 2000. The implementation of the increase in tariÅs for the year 2000 was not
approved by the Parliament due to low customer aÅordability.
Resolution of the KSO is dependent on the negotiations between TELKOM and KSO partners
which is coordinated and will be decided by the Government, and other factors which are beyond the
Company's control, such as tariÅ increases, compensation on termination of the exclusivity rights, and
others.
Resolution of cross ownership issues in aÇliates companies between TELKOM and INDOSAT will
depend on the negotiation process and the restructuring scheme of Indonesia's telecommunication
systems, that will be taken by the Government.
The future potential growth of telecommunication market demand in Indonesia based on a
research study by Boston Consulting Group in 1999 may indicate compound annual growth rate
(CAGR) of local business by 15%, domestic long distance by 17%, international direct dial by 12%,
mobile business by 41%, and internet business by 64%. These businesses would contribute to the total
market growth from local business by 15%, domestic long distance by 22%, international direct dial by
7%, mobile business by 51%, and internet businesses by 5%. It concluded that mobile and internet
businesses are the yardstick of future business in telecommunication. TELKOM will consider this
44
phenomenon in its selected investment activities carefully in order to anticipate diminishing return on
Ñxed telephone revenue. TELKOM will continue to adopt economic measures and other measures to
address the economic diÇculties by initiating cost cutting and eÇciency programs.
It is not possible to determine the future aÅect the continuation of the slow down of economic
activities, which may have impacts on the Company's liquidity and earnings, including the aÅect
Öowing through to the Company's customers.
Item 6: Directors, Senior Management and Employees
A. Directors and Senior Management
In accordance with Indonesian law, the Company has a Board of Commissioners and a Board of
Directors. The two Boards are separate and no individual may be a member of both Boards.
Board of Commissioners
The Board of Commissioners consists of Ñve members, one of whom is the President Commis-
sioner. The members of the Board of Commissioners are elected and dismissed by shareholders'
resolutions at a general meeting of shareholders, which meeting must be attended by the holder of the
Dwiwarna Share and which resolution must be approved by the holder of the Dwiwarna Share.
The current members of the Board of Commissioners of the Company are as follows:
Current Position(s) with TELKOM;
Name Age Other Positions with Institutions; Education
Bacelius Ruru ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 52 Chairman of Commissioner of TELKOM since April 2000.

Chairman of the Jakarta Initiative Taskforce since
April 2000. Deputy Minister of Investment and State-
Owned Enterprises in charge of Supervising and Control
of the Ministry and formerly as Deputy for Mining and
Agro-Industry Business in the same Ministry (1998-2000).
Director General of the State-Owned Enterprise in
Ministry of Finance (1995-1998). Chairman of Capital
Market Supervisory Agency in Ministry of Finance (1993-
1995). Head of Legal Bureau and Public Relations of
Ministry of Finance (1987-1993). 1975-1993 in charge of
director/head of some Directorates/
institutions in Ministry of Finance. Graduate from Faculty
of Law, University of Indonesia (1975). Harvard Law
School (1981).
Rahardjo Tjakraningrat ÏÏÏÏÏÏÏÏÏÏ 57 Commissioner of TELKOM since April 2000.
Commissioner of PT. Multi Eka Karma since 2000.
President Director of PT. Multi Eka Karma (1996 to 2000).
President Director of PT Telesarana Adi Prima (1995 to
1997). Director of Finance of PT.BELTDC (1992 to 1995).
Director of Commercial of PT. Rajasa Hasanah
Perkasa/Era Mobitel (1986 to 1991). Graduate from
Faculty of Law, University of Indonesia (1966).
45
Purnomo Sidhi ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 55 Commissioner of TELKOM since April 2000. Senior

Executive Advisor to the Minister of Communication
(since 1997). Indonesian Air Force Operation
Commander II (1996 to 1997). Vice Commander I of
Indonesian Air Force Operation (1994 to 1996). Senior
Executive Advisor to the Chief of Indonesian Air Force
(1992 to 1993). Graduate from Indonesian Air Force
Academy (1968). Air-Flight Instructor School (1977).
School of StaÅ and Commander of Indonesian Air Force
(1985). S.I.D.M.C., USA (1995).
Noor Fuad ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 53 Commissioner of TELKOM since April 2000. Secretary
General, Ministry of Finance (2000 to date). Commissioner
of PT Inhutani III, Ministry of Forest (1987-1994).
Commissioner of PT Pelabuhan Indonesia I Medan (1995-
1998). Senior Executive Advisor of Human Resources to
the President Director of PT Rajawali Nusindo (1997 to
date). Commissioner of PT Pelabuhan Indonesia III
Surabaya (1998 to date). Commissioner of PT Perkebunan
Nasional VIII Jawa Barat (1999 to date). Commissioner of
PT BRI Sanwa Ì Finance (1999 to date). Graduate from
Faculty of Economy, Gajah Mada University, Yogyakarta
(1972). M.Sc. in Policy Economics, University of Illinois
(1986).
Andi Siswaka FaisalÏÏÏÏÏÏÏÏÏÏÏÏÏ 46 Commissioner of PT TELKOM since April 2000. Director of
Planning and Technology of PT TELKOM (1996-2000),
Vice President of Corporate and Technological Planning of
PT TELKOM (1995-1996), General Manager of Corporate
Planning of PT TELKOM (1993-1995). Head of the North
Jakarta Regional Telecommunication OÇce (1991-1993).
Head of the Kebayoran Baru Service OÇce (1990-1991).
Graduate in Electrical Engineering, Trisakti University,
Jakarta, 1983. Master of Science, American World
University (1998).
The term of each of the Commissioners concludes at the close of the third annual general meeting
of shareholders after the date of his appointment. The Commissioners' business address is Jalan Japati,
1, Bandung 40133, Indonesia.
Board of Directors
The Board of Directors consists of one President Director and four Directors. Directors are elected
and dismissed by shareholders' resolutions at a general meeting of shareholders, which meeting must
be attended by the holder of the Dwiwarna Share and which resolution must be approved by the
holder of the Dwiwarna Share.
46
The current members of the Board of Directors are as follows:
Muhammad Nazif ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 56 President Director of TELKOM since April 2000. Vice
President University of Indonesia 1994-2000. Head of
Department, Faculty of Economics, University of
Indonesia, 1992-1994. Member of Deregulation Team,
Ministry of Finance, 1990-1993. Head of the Secretary for
the Junior Minister of Finance, 1989-1993. Member of
EÇciency Improvement Team of State-Owned Enterprises,
Ministry of Finance, 1989-1991. Executive Director of
Islamic Development Bank, 1990-1991. President Director
of Bank Umum Koperasi Indonesia, 1985-1989. Executive
Director of Bank Duta Ekonomi, 1972-1979. First National
Bank (Citibank), 1968. MBA, Katholieke University,
Leuven, Belgium, 1981. Graduate of Economic Faculty,
University of Indonesia, 1973.
Mursyid Amal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 53 Director of Finance since April 2000. Chairman of Logistic
Assistant Group, TELKOM Corporate OÇce, 1997-2000.
Logistic General Manager TELKOM, 1995-1997. Logistic
General Manager TELKOM of Jakarta Regional Division,
1992-1995. Magister Management (MM), Bandung School
of Management, 1997. Graduate of Economic Faculty, the
Islamic University of Nusantara, 1986.
Komarudin SastrakoesoemahÏÏÏÏÏ 50 Director of Operations and Marketing since April 2000.
Head of TELKOM's Development Division, 1997-2000.
Member of Blue Print Development Team, Directorate
General of Post and Telecommunication, 1999. Member of
KSO Development Team, 1994-1995. Chief of Regional
Division IX Kalimantan, 1992-1993. Graduate of Electrical
Engineering Bandung Institute of Technology, 1976.
TauÑk Akbar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50 Director of Human Resources Development, since April
2000. President Director of PT Aplikanusa Lintasarta, 1994-
2000. Executive General Manager of Palapa Satellites
Operation of TELKOM, 1992-1993. General Manager
Telecommunication Planning of TELKOM, 1990-1992.
Manager Satellite Transmission Planning of TELKOM,
1983-1989. Astronout Training for Indonesia Candidate
(Payload Specialist) NASA, Houston, Texas, 1986.
Telecommunication Management Course, Vancouver,
Canada, 1991. Graduate of Electrical Engineering Bandung
Institute of Technology, 1975.
KristionoÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47 Director of Planning and Technology since April 2000.
Head of TELKOM's Regional Division V, East Java, 1995-
2000. Head of TELKOM IV Project, 1992-1995. General
Manager TELKOM's Logistic Department, 1990-1992.
Deputy of Chief Regional Division VII Denpasar, 1989-
1990. Technical Manager, 1978-1989. Graduate of Electrical
Engineering, Surabaya Institute of Technology, 1978.
47
None of the Directors has a service contract with the Company nor are any such contracts
proposed. The Directors' terms of appointment end on the close of the Ñfth annual general meeting
after the date of appointment. There is no family relationship among any of the Commissioners and
Directors listed above. The Directors' business address is Jalan Japati, 1, Bandung 40133, Indonesia.
B. Compensation
Each Commissioner is granted a monthly honorarium and certain other allowances and is paid an
annual bonus if TELKOM surpasses certain Ñnancial operating targets, the amounts of which are
determined by the shareholders at the general meeting of shareholders. Each Commissioner also
receives a lump-sum bonus paid at the end of the Commissioner's term pursuant to an MOF letter that
applies to all state-owned companies. Each Director is granted a monthly salary and certain other
allowances (including a pension if such Director is otherwise eligible). Each Director also receives an
annual bonus and other incentives if TELKOM surpasses certain Ñnancial and operating targets, the
amounts of which are determined by the shareholders at the general meeting of the shareholders.
Bonuses and incentives are budgeted annually and are based on the recommendation of the Board of
Directors which recommendation must be approved by the Board of Commissioners before submission
to the shareholders. No fees are paid to the Commissioners or Directors for their attendance at their
respective board meetings. In addition, Directors receive certain other in-kind beneÑts, such as housing
and car and driver. For the year ended December 31, 2000, the aggregate compensation paid by the
Company to all Commissioners and Directors as a group was Rp 9.6 billion.
C. Board practices
The principal functions of the Board of Commissioners are to supervise the Board of Directors,
review the Company's development plan, and monitor the performance of its work plan and budget,
and the implementation of its Articles of Association and resolutions of the shareholders' general
meeting. In carrying out supervisory activities, the Board of Commissioners represents the interests of
the shareholders and is accountable to the shareholders in general meeting.
Individual Directors are charged with speciÑc responsibilities. In the event that a vacancy occurs in
the Board of Directors, so long as the position remains vacant, one of the other directors will be
nominated by the Board of Commissioners to perform the work of the absentee director. If, for any
reason, the Company ceases to have any Directors, the Board of Commissioners is to assume the
ongoing obligations of the Board of Directors and must convene a general meeting of shareholders to
elect a new Board of Directors within at least 60 days.
The Board of Directors is generally responsible for managing the business of the Company in
accordance with all applicable laws, the Articles of Association of the Company and the policies and
directives of the general meeting of shareholders and the Board of Commissioners. The Board of
Directors is required to obtain the written approval of the Board of Commissioners for the following
actions: buying or selling the shares of listed companies in excess of the amount stipulated by the Board
of Commissioners; participating in or disposing of other capital investments; establishing subsidiaries;
entering into licensing agreements, management contracts or similar agreements with other entities for
a period of more than one year; selling or otherwise disposing of Ñxed assets; ceasing to collect or
writing oÅ bad debts from the Company's books or inventory in excess of the amount stipulated by the
Board of Commissioners; binding the Company as surety in excess of the amount stipulated by the
Board of Commissioners; and assuming or granting intermediate or long-term loans and assuming
short-term loans not in the ordinary course of business in excess of the amount stipulated in the
Company's work plan and budget, as approved by the Board of Commissioners. In addition, any of the
above transactions which involves 5% or more of the Company's revenues or 10% or more of
stockholders' equity or such other amount as speciÑed in Indonesian capital market regulations must be
authorized by the shareholders at the general meeting of shareholders. In the performance of its duties,
the Board of Directors must act in the interests of the Company.
48
D. Employees
As of December 31, 2000, the Company had 37,705 employees, of which 18,917 and 18,788
personnel are in TELKOM Regions and KSO Regions respectively. TELKOM's eÇciency, as measured
by lines per employee, has improved from 160.1 lines per employee as of December 31, 1999 to 176.7
lines per employee as of December 31, 2000 in all Divisions, including the KSO Divisions, as of
December 31, 2000. This increase is due to the construction of new lines, outsourcing certain business
support activities, and selective employee hiring.
TELKOM KSO Employees remain employees of TELKOM and are subject to all employment rules
and policies of TELKOM in force at that time, except to the extent that rules and policies are
supplemented, in favor of the employee, by the rules and policies of the KSO Unit. Additional KSO
Employees are the employees of the KSO Investor, and TELKOM has no obligation to continue their
employment at the end of the KSO Period.
In general, TELKOM employees receive a base salary and salary-related allowances, a bonus and
various beneÑts, including a pension plan, medical beneÑts for themselves and certain members of their
immediate family, housing allowance, other allowances and certain other beneÑts, including those
related to performance of the employee's working unit.
Bonuses are budgeted in advance by the Board of Directors and the Board of Commissioners and
are paid out in the year following the year in which they are earned. Over the past Ñve years, the size of
the annual bonus pool has ranged from Rp 135 billion to Rp 197 billion. Bonuses paid by TELKOM are
allocated only to Non-KSO Division employees. After the size of the bonus pool is determined,
management allocates the pool among the Divisions depending upon their respective performances,
and uniform bonuses for employees at each staÅ level for each Division are then determined.
Pursuant to the Initial Public OÅering in 1995, 116,667,000 shares of Common Stock were reserved
for mandatory sale to employees of the Company. The Company paid for such shares (which were
sold at the same per share price as the public oÅering price of shares of Common Stock sold in
Indonesia pursuant to the Initial Public OÅering (i.e., Rp 2,050 per share)) on behalf of its employees
as follows: 90% of the purchase price was deducted from employee cash bonuses that had been
previously allocated but not paid; the Company paid the balance of the purchase price plus taxes
payable by its employees on the purchase of such shares (amounting to approximately 15% of the
purchase price) and reported those payments as additional vacation pay, employee incentives and
other allowances.
TELKOM's mandatory retirement age for all employees (other than directors) is 56. Upon reaching
56, employees and their dependents are entitled to a pension under a deÑned beneÑt plan depending
on their length of service to the Company. The amount of the pension entitlement is based on the
employee's years of service and salary level upon retirement and is transferable to dependents upon
the employee's death. Certain changes to the form of beneÑts are required under Pension Law
No. 11/1992. See Note 29 to the TELKOM's Consolidated Financial Statements, for the funded status of
the pension plan. TELKOM also provides post-retirement health care beneÑts to retired employees
hired before November 1, 1995 who have 20 years of service and certain members of their immediate
family, the amount of which is accounted for over the working lives of the employees based on
actuarial assumptions pursuant to U.S. GAAP requirements. See Note 30 to the Company's Consoli-
dated Financial Statements, for the funded status of pension plan. In addition, the Company oÅers job
retraining programs to its retirees and has established a Health Foundation to provide services to its
employees and retirees.
The employment is not subject to a collective bargaining agreement. On March 1st, 2000, TELKOM
employees formed a union named ""Serikat Karyawan TELKOM'' or SEKAR''. The nature of SEKAR in
some extent diÅer with union in general, however, the formation of SEKAR is in line with the
Presidential Decree No.83 of 1998 regarding RatiÑcation of ILO Convention No. 87 of 1948 concerning
the Freedom to form a union and the protection of the right to form an organization. Basically, the
49
formation of SEKAR based on the sense of belonging and to take the right position the implementation
of the Company's policy. Presently, more than 50% of TELKOM employees belong to SEKAR, which
membership is not compulsory. TELKOM has never experienced a strike, except several clariÑcation of
the Company's policy. The Company believes its relations with its employees are good.
In line with the changes in business environment, TELKOM sets its new policy on human
resources called Human Resource Excellence Program to prepare more professional and competent
people to operate and run InfoCom business. The program encompasses Competency Based Human
Resources Management (CBHRM), Retention Plan, Outsourcing, and Early Retirement. As conse-
quence of the implementation of CBHRM, outsourcing program is prepared to assess competencies for
non-core business area that may not necessarily been retained due to easily obtained through
outsourcing.
E. Share ownership
At December 31, 2000, to the Company's knowledge, apart from the Government, there were no
shareholders beneÑcially owning more than 10% of the Company's outstanding Common Stock.
The following table sets forth certain information as of December 31, 2000 with respect to
(1) persons known to the Company to be the owner of more than 10% of the Company's Common
Stock (whether directly or beneÑcially through ADSs); and (2) the total amount of any class of the
Company's Common Stock owned by the Commissioners and Directors of the Company as a group.
Title of Class Identity of Person or Group Amount Owned Percent of Class
Series A Government 1 100.00%

Series B Government 6,672,235,355 66.19%
Series B Commissioners and Directors 57,204 *
* Less than 1%.
Item 7: Major Shareholders and Related Party Transactions

A. Major shareholders
The Government holds a majority of the outstanding common stock of the Company and so
retains control of the Company and has the power to elect all of its Board of Commissioners and all of
its Board of Directors and to determine the outcome of substantially all actions requiring the approval
of the shareholders. In addition, the Company's Common Stock is also owned by Pension Funds,
Insurance Funds and other Institutions, owned or controlled, directly or indirectly, by the Government.
The Government is also the holder of the Dwiwarna Share, which has special voting rights. The
material rights and restrictions which are applicable to the common stock are also applicable to the
Dwiwarna Share, except that the Government may not transfer the Dwiwarna Share and it has a veto
with respect to (i) election and removal of Directors; (ii) election and removal of Commissioners; and
(iii) amendments to the Articles of Association, including amendments to merge or dissolve the
Company prior to the expiration of its term of existence, increase or decrease its authorized capital, and
reduce its subscribed capital. Accordingly, the Government will have eÅective control of these matters
even if it were to beneÑcially own less than a majority of the outstanding shares of common stock.
In December 1996 and May 1999 the Government sold 388 million and 898 million of its B shares
respectively. Pursuant to the Law No. 1 of 1995 on Limited Liability Companies, the minimum issued
and fully paid stock at 25% of the Company's authorized capital stock amounts to Rp 5 trillion. To
conform with the law, at the Annual General Meeting of the Stockholders in 1999, it was resolved to
increase the issued and fully paid capital stock by capitalizing additional paid-in capital into
746,666,640 B shares resulting in a total of 10,079,999,640 outstanding shares.
50
B. Related party transaction
TELKOM is a party to certain agreements and engages in transactions with a number of entities
that are related to the Company, such as joint venture companies, cooperatives and foundations, as
well as the Government and entities that are related to or owned or controlled by the Government,
such as state-owned entities. See Note 31 to the Company's Consolidated Financial Statements. The
most signiÑcant of these transactions include interconnection agreements with Indosat and all of
TELKOM's associated mobile cellular joint venture companies relating to the provision of PSTN
interconnection services, customer billing and other services by the Company. The Company is a party
to various on-lending agreements with the Government. The Company also pays concession fees and
radio frequency usage charges to the MOC with respect to the Company's operations. In addition, the
Company is a party to various agreements with other state-owned entities such as insurance
companies, banks and certain suppliers.
C. Interest of experts and counsel
Not applicable.
Item 8: Financial Information

A. Consolidated Ñnancial statement and other Ñnancial information
Refer to page 5
B. Legal Proceedings
AriaWest, an investor in a Joint Operation Scheme, has recently raised against the Company, in
correspondence between AriaWest and the Company, several claims under Indonesian law. These
putative claims assert (i) AriaWest's entitlements, pursuant to the Good Faith Interim Solution
Agreement; (ii) AriaWest's entitlements, pursuant to the KSO Agreement, to set-oÅs against MTR due
to the Company under the KSO Agreement; and (iii) breach of the KSO Agreement by the Company.
AriaWest has indicated to the Company that it is withholding from the Company certain payments due
to the Company under the KSO Agreement as set-oÅs against its putative claims. However, AriaWest
has not asserted these claims in any legal proceeding; but has asserted them only through written
correspondence addressed to the Company and the Government of Indonesia, as well as verbally
during the course of discussions between the parties. In its correspondence, AriaWest expressly has
purported to reserve its rights to alter or modify at any time its allegations or putative claims against the
Company.
Given the preliminary nature of AriaWest's putative claims, the Company cannot predict whether
any legal proceedings or dispute resolution proceedings under the KSO Agreement will ensure as a
result of such claims. Should any such proceedings be commercial, the Company anticipates that it
would vigorously contest any claims by AriaWest under the KSO Agreement and any right to set-oÅ of
MTR due to the Company asserted by AriaWest.
TELKOM is not currently a party to and, in recent years, has not been a party to, any material legal
or arbitration proceedings or disputes pending or threatened against the Company or with respect to its
properties which are material, or which have had or which may have, a signiÑcant eÅect on the
Company's Ñnancial position.
51
Item 9: The OÅer and Listing
A. OÅer and listing details
The table below sets forth, for the periods indicated, the reported high and low quoted prices for
the currently outstanding Common Stock on the JSX.
SHARE PRICE INFORMATION

Price per Share
Calendar Year High Low
(in Rupiah)
1998
First Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,000 2,225
Second Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,275 2,825
Third Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,625 1,525
Fourth Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,150 1,300
1999
2000
On December 29, 2000, the closing price for a share of Common Stock was Rp 2,050.
The table below sets forth, for the periods indicated, the reported high and low quoted prices of the
ADSs on the NYSE and LSE.
AMERICAN DEPOSITARY SHARE PRICE INFORMATION

Price per Share
(in U.S.$)
1998
First Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 109/16 511/16
LSE 10.55 5.75
Second Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 9∑ 5
LSE 9.75 5.06
Third Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 7 2∑
LSE 7.09 2.8
Fourth Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 81/16 211/16
LSE 8.32 2.58
1999
First Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 8.99 5.69
LSE 8.92 5.80
Second Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 13.08 6.43
LSE 13.01 6.43
Third Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 13.63 6.19
LSE 13.18 6.17
Fourth Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 11 7.19
LSE 11.2 7.22
52
Price per Share
(in U.S.$)
2000
First Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏNYSE 12 91/16
LSE 12.15 9.1875
Second Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 911/16 67/16
LSE 9.625 6.45
Third Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 8 5∑
LSE 7.875 6.10
Fourth Quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE 65/16 4±
LSE 6.425 4.275
On December 29, 2000, the closing price for an ADS was U.S.$4± on the NYSE and U.S.$4.275 on
the LSE.
B. Plan of Distribution
Not applicable.
C. Markets
TELKOM's Common Stock is listed on the Jakarta Stock Exchange (""JSX'') and the Surabaya Stock
Exchange (""SSX''). The JSX is the principal non-U.S. trading market for the Company's Common
Stock. In addition, American Depositary Shares (""ADSs''), each representing twenty shares of
Common Stock, are listed on the New York Stock Exchange (""NYSE'') and the London Stock
Exchange (""LSE'').
The Indonesian Securities Market

Currently there are two stock exchanges in Indonesia. The primary market is the JSX and the other
is the SSX located in Surabaya, East Java. The JSX is the larger and more prominent of the two
exchanges, with an aggregate equity market capitalization of Rp 259.6 trillion at year end 2000 as
compared to Rp 227.9 million for the SSX. Total trading value on the JSX during 2000 was Rp 9.4
trillion, compared with Rp 9.3 million on the SSX.
Overview of the JSX

There are currently two daily trading sessions from Monday to Thursday, 9:30 a.m. to 12:00 noon,
and 1:30 p.m. to 4:00 p.m. There are two trading sessions on Friday, from 9:30 a.m. to 11:30 a.m. and
from 2:00 p.m. to 4:00 p.m.
Following the Decree issued by the Director of the Jakarta Sock Exchange (JSX) No. Kep-331/
BEJ/102000, the price movements for TELKOM shares in the JSX shall be in multiples of Rp 25 and each
price movement should be no more than Rp 25.
Trading is divided into three market segments: regular market, negotiation market, and cash
market. The regular market is the mechanism for trading stock in standard lots on a continuous auction
market during exchange hours. With respect to the trading of stock, the round lots consist of 500 shares
for non-banking and of 5000 shares for banking sectors. Auctioning takes place according to price
priority and time priority. Price priority gives priority to buying orders at a lower price or selling orders
at a higher price. If buying or selling orders are placed at the same price, priority is given to the buying
or selling order placed Ñrst (time priority).
The negotiation market trading consists of (i) block trading, i.e. lots of 200,000 shares or more;
(ii) odd lot trading with round lots of less than 500 shares or less than 5000 shares for banking
companies; (iii) crossing by an exchange member receiving buying and selling orders for the same
53
number of shares at the same price; and (iv) foreign board trading in stocks where foreign ownership
has reached 49% of listed shares. Odd lots may not be traded more than 5% above or below the latest
price on the regular market. Odd lot dealers may set prices within a range of not more than 7% above or
below the regular market price, and must buy or sell stock directly to and from customers in crossing
without charging commission. In the case of newly listed or newly traded shares which have yet to
establish a market price, the price referred to is the initial public oÅering price.
Transactions on the JSX regular market and negotiation market are required to be settled no later
than the fourth trading day after the transactions. In case of a default by an exchange member on
settlement upon the due date, the Indonesian Clearing and Guarantee Corporation, P.T. Kliring
Penjaminan Efek Indonesia (""KPEI'') may perform the obligations or rights of such a defaulting
exchange member, by, for example, buying and/or selling shares in the cash market in order to settle
the defaulted transaction. Any such action by KPEI does not eliminate the liabilities of the defaulting
party, which eÅected the transaction. All cash market transactions must be reported to the JSX. An
exchange member defaulting in settlement is liable to a Ñne of 0.25% for the Ñrst day and thereafter a
Ñne of 0.5% of the transaction value payable to his counterpart in the transaction, and shall also be
issued with a warning. Delay in payment of the Ñne is also liable to a penalty equal to 1% of the Ñne for
each calendar day of delay.
The JSX board of directors may cancel a transaction if proof exists of fraud, manipulation or the use
of insider information. The JSX board of directors may also suspend trading if there are indications of
bogus transactions or jacking up of share prices, misleading information, use of insider information,
counterfeit securities or securities blocked from trading, upon the occurrence of other important events
that may aÅect investment decisions.
Exchange members may charge a fee for their services based on an agreement with the clients up
to a maximum of 1% of the transaction value. When conducting stock transactions on the JSX, exchange
members are required to pay a transaction fee equal to the cumulative transaction value for each month
based on 0.04% (subject to a minimum fee of Rp 250,000) of transaction for stocks and other registered
securities.
Shareholders or their appointees may request the issuer or a Securities Administration Bureau
appointed by the issuer at any time during working hours to register their shares in the issuer's Registry
of Shareholders.
Trading on the NYSE and LSE
The Bank of New York serves as depositary (the ""Depositary'') with respect to the ADSs traded on
the NYSE and the LSE. Each ADS represents twenty shares of Common Stock. As of December 31,
2000 44,960,509 ADSs were outstanding in the United States and there were 218 registered voters of
ADSs.
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the issue
Not applicable.
54
Item 10: Additional Information
A. Share capital
Not applicable.
B. Memorandum and Articles of Association

The Company's articles of association registered with the Ministry of Justice in accordance with the
Limited Liability Company Law No. 1 Year 1995 and announced by Ministerial Decree number C2-
7468.HT.01.04.TH.97 year 1997.
The articles of association among others stated that any transaction involved conÖict of interest
between the Company and directors, commissioners and shareholders should be approved by
shareholders meeting, in which the approval given by majority of independent shareholders. There is
no provision in the article of association that stated determination of compensation of directors and
commissioners and their power to vote in determination of that compensation. According to TELKOM's
article of association, there is no requirement for directors and commissioners to own certain number of
shares to be qualiÑed as director or commissioner of the Company. Directors and commissioners have
no certain right to share in the company proÑts, however, board of directors have responsibility to
make a plan in using the company proÑt. The articles of association stated no limitation of right to own
common shares with voting right. The Company's plan to carry out merger, acquisition and corporate
restructuring should be approved by shareholders meeting in which the holder of Dwiwarna share
attend and give its approval.
C. Material contracts
Solution to the Cross Shareholdings with Indosat
On February 15, 2001, TELKOM and Indosat signed an MOU relating to a series of transactions,
amounting to U.S.$1.5 billion that would eÅectively resolve the joint ownership arrangement between
TELKOM and Indosat.
The MOU calls for the following transactions to occur between TELKOM and Indosat: TELKOM
would acquire Indosat's 35% interest in Telkomsel for U.S.$945 million, while Indosat would acquire
from TELKOM: (i) TELKOM's 22.5% interest in Satelindo for U.S.$186 million, (ii) TELKOM's 37.66%
interest in Lintasarta for U.S.$38 million, and (iii) the KSO IV Assets for U.S.$375 million. Upon the
completion of these transaction TELKOM will pay Indosat an amount of U.S.$346 million.
The transaction is subject to certain conditions, including regulatory and corporate approvals. It is
currently anticipated that both TELKOM and Indosat will seek shareholder approval in May 2001.
D. Exchange controls
Foreign Equity Ownership Restrictions
Prior to September 1997, foreign investors were only permitted to purchase up to 49% of shares
oÅered in a public oÅer and up to 49% of the publicly listed shares of all Indonesian listed companies,
regardless of the nature of their activities. On September 4, 1997, such restrictions were removed for
most Indonesian companies, including TELKOM.
Foreign Exchange
Foreign exchange controls were abolished in 1971 and Indonesia now maintains a liberal foreign
exchange system that permits the free Öow of foreign exchange. Capital transactions, including
remittances of capital, proÑts, dividends and interest, are free of exchange controls. A number of
regulations, however, have an impact on the exchange system. Only banks authorized to deal in
foreign exchange, for example, can execute exchange transactions related to the import and export of
55
goods. Prior approval by the Government is also required for foreign loans with maturities of one year
or longer made to any public enterprise or public entity.
Bank Indonesia holds the authority to issue Rupiah currency and has responsibility for maintain-
ing the stability of the Rupiah. Prior to August 14, 1997, Bank Indonesia maintained stability of the
Rupiah through a trading band policy, pursuant to which Bank Indonesia would enter the foreign
currency market and buy or sell Rupiah, as required, when trading in the Rupiah exceeded bid and
oÅer prices announced by Bank Indonesia on a daily basis. On August 14, 1997 Bank Indonesia
terminated the trading band policy, eÅectively free Öoating the Rupiah against other currencies. Since
that date, the Rupiah has depreciated signiÑcantly against world currencies.
During the past 20 years, the value of the Rupiah has been devalued three times against the
U.S. Dollar. These downward adjustments occurred in November 1978, when the exchange rate was
realigned from 415 to 623 Rupiah to the Dollar; in March 1983, when the rate went from 703 to
970 Rupiah to the Dollar; and in September 1986, when the rate fell from 1,134 to 1,644 Rupiah to the
Dollar. Between the time of the 1986 devaluation and August 14, 1997 the value of the Rupiah has
gradually adjusted downward in value against the Dollar by about 4% annually. Since the free Öoating
regime was implemented in August 1997, the Rupiah Öuctuation has been signiÑcant. During 2000, the
average rate of Rupiah to the Dollar was 8,403 with the highest and lowest rates being 9,675 and 7,035
respectively.
E. Taxation
The following summary of Indonesian, and United States federal income tax matters contains a
description of the principal Indonesian and U.S. federal tax consequences of the purchase, ownership
and disposition of ADSs or shares of Common Stock. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS ABOUT THE INDONESIAN AND UNITED STATES FEDERAL, STATE AND LOCAL
TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
ADSs OR SHARES OF COMMON STOCK.
Indonesian Taxation
The following is a summary of the principal Indonesian tax consequences of the ownership and
disposition of Common Stock or ADSs to a non-resident individual or non-resident entity that holds
Common Stock or ADSs (a ""Non-Indonesian Holder''). As used in the preceding sentence, a ""non-
resident individual'' is a foreign national individual who is not physically present in Indonesia for
183 days or more during any twelve month period or present for any period with the intent to reside in
Indonesia, during which period such non-resident individual receives income in respect of the
ownership or disposition of Common Stock or ADSs, and a ""non-resident entity'' is a corporation or a
non-corporate body that is established, domiciled or organized under the laws of a jurisdiction other
than Indonesia and does not have a Ñxed place of business or otherwise conducts business or carries
out activities through a permanent establishment in Indonesia during an Indonesian tax year in which
such non-Indonesian entity receives income in respect of the ownership or disposition of Common
Stock or ADSs. In determining the residency of an individual or entity, consideration will be given to
the provisions of any applicable double taxation treaty to which Indonesia is a party.
Dividends
Dividends declared by the Company out of retained earnings and distributed to a Non-Indonesian
Holder in respect of Common Stock or ADSs are subject to Indonesian withholding tax, currently at the
rate of 20%, on the amount of the distribution (in the case of cash dividends) or on the shareholders'
proportional share of the value of the distribution. A lower rate provided under double taxation treaties
may be applicable provided the recipient is the beneÑcial owner of the dividend and has provided to
the Company (with a copy to the Indonesian OÇce of Tax Services where the Company is registered)
a certiÑcate of tax domicile issued by the competent authority, or its designee, of the jurisdiction where
56
the Non-Indonesian Holder is domiciled. Indonesia has concluded double taxation treaties with a
number of countries, including Australia, Belgium, Canada, France, Germany, Japan, Malaysia,
Mauritius, The Netherlands, Singapore, Sweden, Switzerland, the United Kingdom and the United
States of America. Under the U.S.-Indonesia double taxation treaty, the withholding tax on dividends is
generally, in the absence of a 25% voting interest, reduced to 15%.
Capital Gains
The sale or transfer of Common Stock listed on an Indonesian stock exchange is subject to
withholding tax at the rate of 0.1% of the value of the transaction. The broker executing the transaction
is obligated to withhold such tax. The holding, sale or transfer of founder shares listed on an
Indonesian stock exchange may, under current Indonesian tax regulations, be subject to additional 0.5%
Ñnal income tax.
Subject to the promulgation of implementing regulations (which have not yet been issued to
date), the estimated net income received or accrued from the sale of movable assets in Indonesia,
which may include Common Stock not listed on an Indonesian stock exchange or ADSs, by a Non-
Indonesian holder (with the exception of the sale of assets under Article 4 paragraph (2) of the
Indonesian income tax law) may be subject to Indonesian withholding tax at the rate of 20%. However,
this provision in the income tax law is not currently applied in practice. It is expected that, if and when
implementing regulations are issued with respect to this provision in the income tax law, in practice
this withholding tax will (i) only be applied if Common Stock not listed on an Indonesian stock
exchange is purchased and paid for by an Indonesian resident subject to tax or by a permanent
establishment in Indonesia of a non-resident entity or individual and (ii) not aÅect the net proceeds
from any sale or transfer of ADSs through a regular trade on the NYSE by a Non-Indonesian Holder.
In cases where a purchaser or Indonesian broker will be required under Indonesian tax laws to
withhold tax on payment of the purchase price for Common Stock or ADSs, that payment may be
exempt from Indonesian withholding or other Indonesian income tax under applicable double taxation
treaties to which Indonesia is a party (including the U.S.-Indonesia double taxation treaty). However,
current Indonesian tax regulations do not provide speciÑc procedures for removing the purchaser's or
Indonesian broker's obligation to withhold tax from the proceeds of such sale. To take advantage of the
double taxation treaty relief, Non-Indonesian Holders may have to seek a refund from the Indonesian
Tax OÇce by making a speciÑc application accompanied by a CertiÑcate of Domicile issued by the
competent tax authority, or its designee; of the jurisdiction in which the Non-Indonesian Holder is
domiciled.
Stamp Duty
Transactions in common stock in Indonesia are subject to stamp duty payable at the rate of
Rp 6,000 on transactions with a value of more than Rp 1,000,000 and Rp 3,000 on transactions with a
value of between Rp 250,000 and Rp 1,000,000. Transactions having a value less than Rp 250,000 are not
subject to stamp duty.
United States Federal Income Taxation

The following is a general description of the principal United States federal income tax conse-
quences of the purchase, ownership and disposition of the ADSs or shares of Common Stock. This
description is for general information purposes only and is based on the United States Internal Revenue
Code of 1986, as amended (the ""Code''), Treasury regulations promulgated there under, and judicial
and administrative interpretations thereof, all as in eÅect on the date hereof and all of which are subject
to change, possibly retroactively. The tax treatment of a holder of ADSs or shares of Common Stock
may vary depending upon his particular situation. Certain holders (including, but not limited to,
insurance companies, tax-exempt organizations, Ñnancial institutions, persons subject to the alternative
minimum tax, broker-dealers, persons that have a ""functional currency'' other than the U.S. Dollar and
57
persons owning, directly or indirectly, 10% or more of the voting shares of the Company) may be
subject to special rules not discussed below. Except as indicated, the following summary is limited to
United States persons who will hold the ADSs or shares of Common Stock as ""capital assets'' within
the meaning of Section 1221 of the Code. The discussion below does not address the eÅect of any state
or local tax law on a holder of the ADSs or shares of Common Stock.
As used herein, the term ""United States Person'' means (i) a citizen or resident of the United
States for United States federal income tax purposes, (ii) a corporation, a partnership or other entity
created or organized under the laws of the United States or any State thereof (unless, in the case of a
partnership. Treasury Regulations otherwise provide), (iii) an estate the income of which is subject to
United States federal income tax without regard to its source or (iv) a trust if a court within the United
States is able to exercise primary supervision over the administration of the trust and one or more
United States persons have the authority to control all substantial decisions of the trust.
Holders of ADRs evidencing Common Stock will be treated as the owners of the Common Stock
represented by those ADSs. Accordingly, no gain or loss will be recognized upon the exchange of ADSs
for the holder's proportionate interest in the shares of Common Stock, a holder's tax basis in the
withdrawn shares of Common Stock will be the same as his tax basis in the ADSs surrendered
therefore, and the holding period in the withdrawn shares of Common Stock will include the period
during which the holder held the surrendered ADSs.
Taxation of Dividends
The gross amount of a distribution with respect to ADSs or shares of Common Stock, without
reduction for Indonesian taxes withheld, will be treated as a dividend taxable as ordinary income on the
date of receipt by the Depositary or the holder of such shares, respectively, to the extent of the
Company's current and accumulated earnings and proÑts as determined for U.S. federal income tax
purposes. Distributions, if any, in excess of such current and accumulated earnings and proÑts will
constitute a non-taxable return of capital and will be applied against and reduce such holder's tax basis
in such ADSs or shares of Common Stock. To the extent that such distributions are in excess of such
basis, the distributions will constitute capital gain as discussed below. U.S. corporate holders will
generally not be allowed a deduction for dividends received in respect of distributions on ADSs or
shares of Common Stock.
A pro rata stock dividend by the Company will not be considered a taxable dividend.
If a dividend distribution is paid with respect to ADSs or shares of Common Stock in Rupiah, the
amount included in income will be the U.S. Dollar value, on the date of receipt by the Depositary or the
holder of such shares of Common Stock, respectively, of the amount distributed. Any subsequent gain
or loss in respect of such Rupiah arising from exchange rate Öuctuations will be ordinary income or
loss. If the Depositary converts the Rupiah to U.S. Dollars on the date it receives such Rupiah, United
States persons will not recognize any such gain or loss.
Subject to the limitations and conditions set forth in the Code, United States persons may elect to
claim a credit against their United States federal income tax liability for Indonesian tax withheld from
dividends received in respect of the ADSs or shares of Common Stock. Dividends will generally
constitute non-U.S. source ""passive income'' or ""Ñnancial services income.'' The rules relating to the
determination of the foreign tax credit are complex and prospective purchasers should consult their
personal tax advisors to determine whether and to what extent they would be entitled to such credit.
United States persons that do not elect to claim foreign tax credits may instead claim a deduction for
Indonesian tax withheld.
A holder of ADSs or shares of Common Stock that is, with respect to the United States, a foreign
corporation or a non-resident alien individual (a ""non-U.S. holder'') will generally not be subject to
U.S. federal income tax on dividends received on Common Stock or ADSs, unless (i) such gain is
eÅectively connected with the conduct by the non-U.S. holder of a U.S. trade or business or (ii) the
58
non-U.S. holder is an individual who is present in the U.S. for at least 183 days during the taxable year
of the disposition and certain other conditions are met, or (iii) the non-U.S. holder is an individual and
there is a present or former connection between such non-U.S. holder and the United States, including,
without limitation, such non-U.S. holder's status as a former citizen thereof or a former resident
thereof.
Taxation of Capital Gains

The sale or other disposition of ADSs or shares of Common Stock (or pre-emptive rights with
respect to such ADSs or shares) by a United States person will generally result in the recognition of
U.S. source gain or loss in an amount equal to the diÅerence between the amount realized on the sale
or other disposition and the holder's adjusted basis in such ADSs or shares. This will result in a long-
term or short-term capital gain or loss, depending on whether the ADSs or shares of Common Stock
have been held for more than one year. Long-term capital gain of a non-corporate holder is currently
subject to a maximum rate of 20% in respect of property with a holding period of more than one year.
Any gain will be U.S. source for foreign tax credit purposes. Any loss will generally be allocated against
U.S. source income.
A non-U.S. holder of ADSs or shares of Common Stock will not be subject to U.S. federal income
tax on gain from the sale or other disposition of such ADSs or shares unless (i) such gain is eÅectively
connected with the conduct by the non-U.S. holder of a U.S. trade or business or (ii) the non-U.S.
holder is an individual who is present in the U.S. for at least 183 days during the taxable year of the
disposition and certain other conditions are met, or (iii) the non-U.S. holder is an individual and there
is a present or former connection between such non-U.S. holder and the United States, including,
without limitation, such non-U.S. holder's status as a former citizen thereof or a former resident
thereof.
Passive Foreign Investment Company Status

Special adverse United States federal income tax rules apply to holders of equity interests in a
corporation classiÑed as a passive foreign investment company (""PFIC'') under the Code. A foreign
corporation will constitute a PFIC for United States federal income tax purposes if 75% or more of its
gross income for a taxable year consists of passive income (generally, interest, dividends, rents,
royalties and net gain from the disposition of assets that give rise to such income) or 50% or more of its
average assets held during a taxable year consists of passive assets. Passive assets are deÑned as assets
that give rise, or that reasonably could give rise during the reasonably foreseeable future, to passive
income.
Based on the Company's existing and anticipated future operations, the Company believes that it
is not, intends and anticipates that it will not become in the foreseeable future, a PFIC. If the Company
is not operated in the manner currently anticipated, however, the Company may be considered a PFIC
for the current or for a subsequent year depending upon the composition of the Company's income or
assets.
If the Company is or becomes a PFIC, any ""excess distribution'' realized by a U.S. Holder with
respect to its ADSs or shares of Common Stock would be allocated over the entire period during which
the U.S. Holder held such ADSs or shares of Common Stock and would be subject to a ""deferred tax
amount'' to the extent not allocated to the current year. Any ""excess distribution'' allocated to the
current year would be treated as ordinary income. The ""deferred tax amount'' consists of a tax imposed
at the highest rate applicable to the year or years to which an ""excess distribution'' is allocated plus
interest on such tax computed from the due date of the U.S. Holder's tax return for the year or years to
which such ""excess distribution'' is allocated.
In general, an ""excess distribution'' is any distribution with respect to the Company's ADSs or
shares of Common Stock to the extent it exceeds 125% of the average distributions with respect to such
ADSs or shares of Common Stock received by the U.S. Holder over the prior three years. An ""excess
59
distribution'' also includes any gain recognized by the U.S. Holder with respect to its ADSs or shares of
Common Stock.
If the Company is classiÑed as a PFIC, it should be possible to avoid the adverse tax consequences
associated therewith but only if (i) the U.S. Holder elects to annually mark-to-market the ADSs or
shares of Common Stock and recognize ordinary gain or loss therefrom or (ii) assuming certain
conditions are met (which is not likely to be the case with respect to the Company), the U.S. Holder
elects to include in income annually its share of the ordinary earnings and capital gain of the Company.
Should the Company ever be classiÑed as a PFIC, U.S. Holders are advised to consult their tax advisors
concerning the United States federal income tax consequences of holding ADSs or shares of Common
Stock and of making the mark-to-market election. A U.S. Holder who owns ADSs or shares of
Common Stock during any year that the Company is a PFIC must Ñle with the IRS Form 8621.
United States Backup Withholding and Information Reporting
Payments made by a United States paying agent or other United States intermediary in respect of
the ADSs or shares of Common Stock may be subject to information reporting to the IRS and a 31%
backup withholding tax. Backup withholding will not apply, however, (i) to a holder who furnishes a
correct taxpayer identiÑcation number and makes any other required certiÑcation, or (ii) to a holder
who is otherwise exempt from backup withholding. Generally, a U.S. Holder will provide such
certiÑcation on Form W-9 (Request for Taxpayer IdentiÑcation Number and CertiÑcation) and a non-
U.S. Holder will provide such certiÑcation on Form W-8 (CertiÑcate of Foreign Status).
Any amounts withheld under the backup withholding rules from a payment to a holder will be
allowed as a refund or a credit against such holder's United States federal income tax, provided that the
holder has complied with applicable reporting obligations.
F. Dividends and paying agents
Not applicable.
G. Statement by experts
Not applicable.
H. Documents on display
Not applicable.
I. Subsidiary information
As of December 31, 2000, TELKOM had stakes in 19 companies operating in telecommunications

related businesses. All the subsidiaries (except for Infomedia Nusantara which starting 1999 was
consolidated and holds 18.50% Medianusa Pte. Ltd, a sales agent domiciled in Singapore, in search of
advertisers for telephone directories) contributed Rp 342.9 billion to Other Income. The following table
sets forth TELKOM's Joint venture companies and TELKOM's percentage ownership in each of them.
Telkom
No. Company Ownership Business Operations
(%)
1. Telkomsel 42.72% GSM Cellular (national coverage)
2. Satelindo 22.50% GSM Cellular (national coverage),
international direct dialling (IDD),
Satellite for domestic & international
60
Telkom
No. Company Ownership Business Operations
(%)
3. Telekomindo Primabhakti 9.00% Holding company: GSM Cellular GSM
(national coverage), Revenue Sharing
Arrangement on TELKOM's Ñxed lines,
Ñnance, and hotel
4. Komselindo 35.00% AMPS Cellular (regional coverage)
5. Mobisel 25.00% NMT-450 Cellular (regional coverage)
6. Metrosel 20.17% AMPS Cellular (regional coverage)
7. Ratelindo 12.86% Fixed Wireless (regional coverage)
8. Aplikanusa Lintasarta 37.66% VSAT, Internet, Digital Data Network,
and Electronic Banking System
9. PasiÑk Satelit Nusantara 22.57% Satellite transponder and communication
10. Infomedia Nusantara 51.00% Information on telecommunication
subscribers (Yellow Pages)
11. Multimedia Nusantara 31.00% Multimedia services
12. Indonusa Telemedia 35.00% Multimedia services
13. Patra Telekomunikasi Indonesia 30.00% VSAT for oil companies
14. Citra Sari Makmur 25.00% VSAT and telecommunication
technology consulting
15. Batam Bintan Telekomunikasi 5.00% Fixed line in Batam and Bintan Islands
16. Bangtelindo 3.18% Construction and Consulting
17. Menara Jakarta 20.00% Infrastructure for multimedia services in
Jakarta
18. Tangara Mitrakom 25.00% VSAT
19. Napsindo Primatel Internasional 32.00% Network Access point
Telkomsel
PT Telekomunikasi Selular (""Telkomsel'') was established in 1995 as a joint venture company
between TELKOM and Indosat to operate a nation-wide GSM mobile cellular network. TELKOM's
initial capital contribution to Telkomsel was its existing GSM network facilities in Riau and North
Sumatera, which were valued for such purposes at Rp 66.6 billion. During 1996, following an
international competitive bidding process, PTT Telecom B.V. (""PTTTBV'') of the Netherlands,
P.T. Setdco Megasel Asia (""Setdco''), a private Indonesian company, and TELKOM subscribed to new
shares in Telkomsel for an aggregate consideration of approximately U.S.$550 million, including
approximately U.S.$502 million in cash. As a result of the foregoing investments, ownership interests in
Telkomsel became: TELKOM (42.72%); Indosat (35.0%); KPN Telecom BV(17.28%); and PT Setdco
Megacell Asia (5.0%). As of December 31, 2000, Telkomsel had approximately 1,687,339 subscribers in
the major population centers in all of Indonesia's provinces.
Satelindo
PT Satelit Palapa Indonesia (""Satelindo'') is a joint venture company established in January 1993
and is owned by TELKOM (22.5%), Indosat (7.5%), P.T. Bimagraha Telekomindo (45%), and
DeTeAsia Holding GmbH, Germany (25%), a subsidiary of Deutsche Telekom. Pursuant to separate
Ministerial decrees, Satelindo has been granted a license to operate international telecommunications,
satellite services, and to provide nation-wide GSM mobile cellular services. Under its license, Satelindo
is prohibited from linking its satellites to the PSTN. Satelindo has been granted 10 MHz of the available
GSM frequency bandwidth and, as of December 31, 2000, had approximately 1,055,306 mobile cellular
subscribers in the major population centers in all provinces.
61
Telekomindo Primabhakti
PT Telekomindo Primabhakti (""Telekomindo'') is a joint venture company in which TELKOM has
a 9% interest, P.T. Rajawali Wira Bhakti Utama has an 84.2% interest and other parties collectively hold
a 6.8% interest. Telekomindo, as a holding company, among others provides GSM mobile cellular
services nation-wide through Excelcomindo, a joint venture subsidiary with NYNEX. Telekomindo is
an investor in four Ñxed wire line PBHs with TELKOM: (i) two in Jakarta comprised of 150,000 lines;
(ii) one in Surabaya comprised of 50,000 lines; and (iii) one in Bandung comprised of 15,000 lines.
Such PBHs are due to expire in 2002 and 2005. Telekomindo also participates in a PBH with TELKOM
for the operation of a group of three AMPS mobile cellular networks. This PBH will expire in June 2001
and in accordance with the PBH agreement TELKOM will own the PBH assets.
Komselindo
PT Komunikasi Selular Indonesia (""Komselindo'') is a joint venture company established in
January 1995 between TELKOM (35%) and P.T. Elektrindo Nusantara (""Elektrindo'') (65%) to operate
an AMPS mobile cellular network, which was previously operated as a PBH between TELKOM and
Elektrindo. TELKOM transferred the switching operations of this PBH to Komselindo in May 1995 as
payment for the purchase price of its interest in the company. As of December 31, 2000, Komselindo
had a total of approximately 74,858 subscribers in Jakarta, Bandung, Medan, Manado and Ujung
Pandang.
Mobisel
PT Mobile Selular Indonesia (""Mobisel'') is a joint venture company established in January 1996
between TELKOM (25%), TELKOM's Pension Fund (5%) and P.T. Rajasa Hazanah Perkasa (""Rajasa'')
(70%). Mobisel provides the NMT-450 services formerly provided by TELKOM and Rajasa pursuant to
a PBH in Jakarta Central Java, East Java, West Java, Bali and Lampung. As at December 31, 2000,
Mobisel had approximately 14,037 subscribers. Following a continuous evaluation and restructuring
policy of its subsidiary, TELKOM has decide to divest its ownership in this Company and has set its
intention of selling its ownership in this company.
Metrosel
PT Metro Selular Indonesia (""Metrosel'') is a joint venture company owned by TELKOM
(20.17%), P.T. Centralindo Panca Sakti (""CPS'') (51.23%), Asia Link (20%), TELKOM's Pension Fund
(3.83%) and others. Metrosel provides the AMPS services previously provided by TELKOM and CPS
pursuant to a PBH in Central and East Java. TELKOM transferred the switching operations of this PBH
to Metrosel in 1996 as payment for the purchase price of its equity interest in the company. As at
December 31, 2000, Metrosel had a total of approximately 62,981 subscribers.
Ratelindo
PT Radio Telepon Indonesia (""Ratelindo'') is a joint venture company established in 1993 by
TELKOM and P.T. Bakrie Electronics Company, a private company in which PTT Netherlands is a
shareholder. Ratelindo began oÅering Ñxed cellular services in Jakarta in August 1995 and, as at
December 31, 2000, had approximately 119,495 subscribers. Besides TELKOM, Ratelindo is the only
other provider of Ñxed wireless technology in Indonesia. TELKOM has a 12.86% ownership interest in
Ratelindo.
Lintasarta
PT Aplikanusa Lintasarta (""Lintasarta'') is a joint venture company, owned by TELKOM
(37.66%), Indosat (32.64%), the pension funds of various banks (26.02%), and others (3.68%).
Lintasarta provides PSDN services in cooperation with TELKOM and participates with Indosat and
TELKOM in another joint venture company to provide VSAT services, e-mail services, and credit card
62
payphones. Lintasarta also transmits data over ordinary telephone lines and provides network
application facilities for Indonesia's oÇcial electronic bank reporting system as well as other services to
the banking industry. Lintasarta is subject to the Government policy to eliminate such cross-ownership
with INDOSAT. TELKOM and INDOSAT signed an MOU relating to a series of transactions that
would eÅectively resolve the joint ownership arrangement between TELKOM and INDOSAT. IN-
DOSAT will acquire TELKOM's 37.66% interest in Lintasarta for U.S.$38 million. This transaction is
subject to certain conditions, including regulatory and corporate approvals. It is currently anticipated
that both TELKOM and INDOSAT will seek shareholder's approval by the end of April 2001
(See:""Material Contracts: Solution to the Cross Shareholdings with INDOSAT'').
PasiÑk Satelit Nusantara
PT PasiÑk Satelit Nusantara (""PSN'') is a private Indonesian satellite company, which conducted
an initial public oÅering of its common stock on NASDAQ in June 1996. The shareholders of PSN
include TELKOM (22.57%), Elektrindo (22.9%), Hughes Communications (8.5%), Telesat Canada
(8.5%), and others (37.53%), including holders of ADSs (14.67%). PSN provides satellite transponder
leasing and satellite-based communication services to nations in the Asia PaciÑc region.
Infomedia Nusantara
TELKOM's stake in P.T. Infomedia Nusantara (""Infomedia'') (previously known as ""Elnusa

Yellow Pages'') was made initially in September 1995 by applying the royalties earned by the
Company from Infomedia to the subscription price of the shares. The Company earns a royalty under a
cooperation agreement with Infomedia on publishing telephone directories. Infomedia is engaged in
providing telecommunications information and other information services in the form of printed and
electronic media. As of October 7, 1999, the Company's equity interest in Infomedia is 51%.
Multimedia Nusantara
PT Multimedia Nusantara (""Multimedia'') is a joint venture company owned by TELKOM (31%),

Indosat Megamedia (15%), TVRI Foundation (5%), and Indocitra Grahabawana (49%). Multimedia
provides pay television and multimedia telecommunications services.
Indonusa Telemedia
In October 2000, TELKOM increased its ownership in PT Indonusa Telemedia (""INT'') by adding
equity call of Rp 14 billion. The Company currently holds 35% ownership interest and is expected to
hold 57.5% ownership interest in INT when the legal requirements pertaining to the transaction
completed. INT engages in interactive multimedia services including TV Cable and internet.
Patra Telekomunikasi Indonesia
Since September 1995, TELKOM had a 30% equity interest in PT Patra Telekomunikasi Indonesia
(""Patrakomindo''). Patrakomindo is a joint venture company whose other shareholders are Indosat
(10%), Elnusa (40%), and Tanjung Mustika (20%). Patrakomindo provides satellite communication
and related services and facilities to the petroleum industry. Following a continuous evaluation and
restructuring of its aÇliates s well as the government policy to eliminate cross-ownership between
TELKOM, TELKOM has decide to divest its ownership in this company and has express Patrakomindo
is subject cross-ownership with INDOSAT, with regard to the government policy to eliminate such
cross-ownership either TELKOM or INDOSAT or both parties should divest its ownership in
Patrakomindo. See ""Regulation''. Currently TELKOM and INDOSAT are engaging negotiation on this
matter.
63
Citra Sari Makmur
TELKOM converted its ownership in PT Citra Sari Makmur (""CSM'') from PBH to JVC in
November 1996. The shareholders of CSM are TELKOM (25%), Subagio W. (38.29%), and Bell Atlantic
Indonesia Inc. (36.71%). CSM provides consultancy services relating to applications of VSAT and other
telecommunications technology and related facilities.
Batam Bintan Telekomunikasi

PT Batam Bintan Telekomunikasi (""BBT'') provides Ñxed line telecommunications services at
Batamindo Industrial Park at Muka Kuning, Batam Island and at Bintan Beach International Resort and
Bintan Industrial Estate in Bintan Island, which are special economic and tourist development zones on
those islands. The shareholders of BBT are Batamindo (95%) and TELKOM (5%).
Bangtelindo
PT Bangtelindo was established in 1994. The shareholders of Bangtelindo are TELKOM (3.18%),
TELKOM's Pension Fund (82%), and others (14.82%). Bangtelindo's primary business is providing
consultancy services on the installation and maintenance of telecommunications facilities. Bangtelindo
is subject to cross-ownership with INDOSAT and TELKOM may decide to maintain its ownership in
this company.
Menara Jakarta
As of 1997, the Company has held a 20.00% equity interest in PT Menara Jakarta (""MJ''). MJ plans
to construct and operate building towers and related telecommunications facilities. Pending improve-
ment in the economic and social situation in Indonesia, this company is not actively pursuing its
development plans. MJ is subject to cross-ownership with INDOSAT, with regard to the government
policy to eliminate such cross ownership either TELKOM or INDOSAT or both parties should divest its
ownership in MJ. See ""Regulation'' TELKOM has express its intention of selling its ownership in this
company.
Tangara Mitrakom
TELKOM holds a 25% equity interest in Tangara Mitrakom (Tangara). Tangara's main business is
the provision of micro earth station communication services. Tangara's other shareholders are PT
Prima Tangara Citra (65%) and Koperasi Pegawai BNI-46 Swadharma (10%). Following a continuous
evaluation and restructuring of its aÇliates, TELKOM has decided to divest its ownership in this
company and has express its intention of selling its ownership in this company.
Napsindo Primatel Internasional

PT Napsindo Primatel Internasional (Napsindo) was established on December 30, 1998 and its
shareholders are TELKOM (32%) and PT Infoasia Sukses Mandiri (68%). Napsindo's primary business
includes providing Network Access Point (NAP) for Internet TraÇc Consolidation in Indonesia and
Voice Over Data Services.
Item 11: Quantitative and Qualitative Disclosure About Market Risk

Disclosure About Market Risk
The Company is exposed to market risks primarily from changes in foreign currency exchange
rates, changes in interest rates and equity price risk on the value of its long-term investments. The
Company does not generally hedge its monetary assets and liabilities against its foreign currency
liabilities, which have a maturity of between 15 to 20 years, as it believes that the expenses associated
with fully hedging such liabilities is not justiÑed. Instead the company hedged its obligations for the
related year. As of December 31, 2000, approximately 7.13% of TELKOM's foreign currency denomi-
64
nated obligations was hedged using foreign currency time deposits (given the general unavailability of
forward contracts to hedge foreign currency obligations in Indonesia). The Company has hedged
foreign currency denominated obligation for the year 2000, in the amount of 52.03%. The Company's
exposure to interest rate risk is managed through maintaining a mix of Ñxed and variable rate liabilities
and assets, including short term Ñxed rate assets, rates for which are reset periodically. The Company's
exposure to such market risks Öuctuated signiÑcantly during 1998, 1999, and 2000 as the Indonesian
economy has been aÅected by a signiÑcant Öuctuation of the Rupiah and interest rates. The Company
is not able to predict whether such conditions will continue during the remainder of 2002 or thereafter.
Interest Rate Sensitivity

The Company's exposure to interest rate Öuctuations results primarily from Öoating rate long-term
debt pursuant to loans under the Government on-lending program which have been used to Ñnance
the Company's capital expenditures and which bears interest at rates based on the average three month
term Bank Indonesia CertiÑcate during the last six-month before the six-month period within which the
installment falls due, plus a Ñxed percentage of margin. See Note 15 to the Company's Consolidated
Financial Statements. To the extent interest rates in Indonesia Öuctuate signiÑcantly, as they did from
11.25% in early 2000 to approximately 13.53% in early 2001, the Company's interest obligations under
its long term debt would increase.
The table below provides information about the Company's material Ñnancial instruments that are
sensitive to changes in interest rates. For debt obligations and time deposits, the table presents principal
cash Öows and related weighted average interest rates by expected maturity dates. The information is
presented in Rupiah equivalents, which is the Company's reporting currency. The instrument's actual
cash Öows are denominated in Rupiah, U.S. Dollars, Netherlands Guilders, French Francs, Deutsche
Marks, and Japanese Yen, as appropriate and as indicated in the table. The information presented in the
table has been determined based on the following assumptions: (i) Ñxed interest rates on Rupiah time
deposits are based on interest rates oÅered in eÅect as of February 14, 2001, by the banks where such
deposits were located; (ii) variable interest rates on Rupiah denominated long-term liabilities are
calculated as of February 14, 2001 and are based on contractual terms setting interest rates based on the
average three month term Bank Indonesia CertiÑcate during the last six-month period within which the
instalment falls due, plus a Ñxed percentage of margin; (iii) variable interest rates on U.S. Dollars and
French Francs are based on interest rates oÅered by the various lending institutions to the Republic of
Indonesia as of February 14, 2001; and (iv) the value of marketable securities is based on the value of
such securities at February 14, 2001. However, no assurance can be given that such assumptions will be
correct for future periods. Such assumptions and the information described in the table may be
inÖuenced by a number of factors, including changes in interest rates in Indonesia and other monetary
and macro economic factors aÅecting Indonesia. Such assumptions are diÅerent from the rates used in
65
the Company's Consolidated Financial Statements, and accordingly amounts shown in the table may
vary from amounts shown in the Company's Consolidated Financial Statements.
Outstanding Balance as at
December 31, 2000
Foreign Rp Expected Maturity Date
Currency Equivalent Rate 2001 2002 2003 2004 2005 2006-2025
(in thousands) (Rp in millions) (%) (Rp in millions)
ASSETS
Fixed Rate
Cash and cash
equivalents
Deposit on call and
Time deposit
Rupiah
PrincipalÏÏÏÏÏÏÏ 2,316,785
Interest ÏÏÏÏÏÏÏÏ 12.52
U.S. Dollar
PrincipalÏÏÏÏÏÏÏ 44,869 429,643
Short-term
Investments
Time deposits
Rupiah
PrincipalÏÏÏÏÏÏÏ 3,866,274
U.S. DollarÏÏÏÏÏÏÏ 300 2,879
Marketable Securities
Rupiah ÏÏÏÏÏÏÏÏÏÏ 1,837
LIABILITIES
Long-term debt Ì
Related party
Variable Rate
Rupiah
PrincipalÏÏÏÏÏÏÏÏÏ 2,809,298 12.5 (256,949) (245,681) (242,039) (237,684) (234,864) (1,592,081)
Interest ÏÏÏÏÏÏÏÏÏÏ (416,383) (327,475) (294,340) (262,615) (230,532) (1,192,200)
French Franc
PrincipalÏÏÏÏÏÏÏÏÏ 42,037 57,767 8.5 (7,702) (7,702) (7,702) (7,702) (7,702) (19,256)
Interest ÏÏÏÏÏÏÏÏÏÏ (4,701) (4,052) (3,404) (2,763) (2,108) (2,435)
U.S. Dollars
PrincipalÏÏÏÏÏÏÏÏÏ 212,418 2,055,145 8.7 (171,430) (196,161) (199,940) (199,940) (199,940) (1,087,734)
Fixed Rate
Rupiah
PrincipalÏÏÏÏÏÏÏÏÏ 1,436,554 13.2 (186,513) (153,244) (147,326) (124,483) (94,867) (730,121)
French Franc
U.S. Dollars
PrincipalÏÏÏÏÏÏÏÏÏ 180,788 1,749,125 5.8 (133,983) (133,983) (133,983) (143,639) (155,394) (1,048,143)
Japanese Yen
PrincipalÏÏÏÏÏÏÏÏÏ 15,858,742 1,336,993 3.1 (31,318) (31,318) (31,318) (31,318) (58,199) (1,153,522)
Netherlands Guilder
Exchange Rate Sensitivity

The Company's exposure to exchange rate Öuctuations results primarily from long term debt
obligations and accounts receivable and payable, which are primarily paid for through draw downs
66
under the Government on-lending program and are expressed in U.S. Dollars, Yen, French Francs,
Deutsche Marks and Netherlands Guilders. For a description of the Company's foreign currency assets
and liabilities, see Note 38 to the Company's Consolidated Financial Statements. Part of these
obligations might be oÅset by increases in the value of foreign currency time deposits and by increases
in the value of foreign currency accounts receivable, assuming that the counter-parties are able to meet
their foreign currency obligations to TELKOM at market rates.
The table below provides information about the Company's Ñnancial instruments by functional
currency and presents such information in Rupiah equivalents, which is the Company's reporting
currency. The information on instruments and transactions that are sensitive to foreign exchange rates,
including U.S. Dollar, Netherlands Guilder, French Franc, Deutsche Mark, Yen, Swedish Krona, and
Australian Dollar debt obligations and term deposits and the Company's accounts payable and
receivable. The table presents principal cash Öows by expected maturity dates. The information
presented in the table has been determined based on the assumptions the exchange rate for U.S.
Dollars is based on the rates quoted by Bridge Telerate on February 28, 2001 for buying and selling rates
for U.S. Dollars of Rp 9,833, as well as the exchange rates for other currencies. However, no assurance
can be given that such assumptions will be correct for future periods. Such assumptions and the
information described in the table may be inÖuenced by a number of factors, including a Öuctuation
and/or depreciation of the Rupiah in future periods.
Outstanding Balance
as at
December 31, 2000
Currency Equivalent 2001 2002 2003 2004 2005 2000-2005
(in (Rp in (Rp in millions)
thousands) millions)
ASSETS
Fixed Rate
Cash and cash equivalents
Current Account
U.S. Dollars ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,213 11,614
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 172 14
French Francs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,631 6,298
Swedish Krona ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 285 291
Deutsche Mark ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.47 2
Great Britain
Pound Sterling ÏÏÏÏÏÏÏÏÏÏÏÏ 3 40
Deposits on call and time
deposits
U.S. Dollars ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 44,871 429,643
Temporary investments
U.S. Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 300 2,879
Accounts Receivable
U.S. Dollars ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,966 143,299
Advances and others
U.S. Dollars ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
French Francs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
Australian Dollars ÏÏÏÏÏÏÏÏÏÏÏÏÏ
67
Outstanding Balance
as at
December 31, 2000
Currency Equivalent 2001 2002 2003 2004 2005 2000-2005
(in (Rp in (Rp in millions)
thousands) millions)
LIABILITIES
Accounts payable
U.S. Dollars ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 702 6,790
FRF ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18,971 26,070
Singapore DollarÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 6
Malaysian RinggitÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 5
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,264,150 106,576
Deutsche Mark ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 230 1,058
Accrued expenses
U.S. Dollars ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,854 114,683
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 82,389 6,946
French Francs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,307 8,667
Netherland Guilder ÏÏÏÏÏÏÏÏÏÏÏÏ 507 2,075
Advances from customers and
suppliers
U.S. Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 938 4,076
Current maturities of long-term
debt-related party
U.S. Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 31,567 305,412
French Francs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18,824 25,868
Long-term debt
Related Party
U.S. Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 361,639 3,498,858 (370,471) (392,600) (404,356) (425,768) (435,424) (1,775,652)
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,487,259 1,305,675 (32,741) (32,741) (32,741) (64,027) (95,313) (1,079,430)
French Francs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 128,967 177,225 (25,868) (25,868) (25,868) (25,868) (25,868) (73,753)
Netherland Guilder ÏÏÏÏÏÏÏÏÏÏ 16,743 68,505 (15,523) (15,523) (15,523) (15,523) (15,523) (3,343)
Third Parties
U.S. Dollars ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39,652 383,638 365,112
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,967,149 165,809 115,099
French Francs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 44,492 61,141
Netherland Guilder ÏÏÏÏÏÏÏÏÏÏ 36 149
Deutsche marks ÏÏÏÏÏÏÏÏÏÏÏÏÏ 40 184
Australian dollars ÏÏÏÏÏÏÏÏÏÏÏÏ
Swedish Krona ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ
(1) Liabilities in 2001 include Rp 173,396, U.S.$37.7 million and Í1,839.7 million which are draw downs pursuant to the on-
lending program with the Government, which, prior to authorizations being issued by the Government, are classiÑed as
non-interest bearing long-term debt to third parties, net of advances. See Note 15 of the Company's Consolidated Financial
Statements.
Equity Price Risk
The Company's long term investments consist primarily of minority investments in the equity of
private Indonesian companies. With respect to the Indonesian companies in which the Company has
investments, the Ñnancial performance of such companies may be aÅected by the Öuctuation of macro
economic and social conditions such as the level of economic activity, Rupiah exchange rates against
other currencies, inÖation, and interest rates.
Summary of SigniÑcant DiÅerences Between Indonesian GAAP and U.S. GAAP
The Company's consolidated Ñnancial statements have been prepared in accordance with Indone-
sian GAAP, which diÅers in certain respects from U.S. GAAP. The signiÑcant diÅerences are described
in the approximations in Notes 43 and 44 to the Company's Consolidated Financial Statements.
68
The signiÑcant diÅerences between Indonesian and U.S. GAAP as applied to the Company's
income statements are in the treatment of capitalization of foreign exchange losses, equity in net
income (loss) of investees, pensions, revaluation of property, plant and equipment, revenue sharing
arrangements and stock issuance costs. The causes of the diÅerences are as discussed below:
Foreign Exchange DiÅerential on Construction in Progress

Under Indonesian GAAP, commencing in 1997 foreign exchange diÅerential resulting from loans
used to Ñnance assets under construction is required to be capitalized. Capitalization of foreign
exchange diÅerential ceases when construction is substantially complete and the asset is ready for its
intended use. Under U.S. GAAP, foreign exchange diÅerential is required to be charged to current
operations. Consequently, on a U.S. GAAP basis, the Company's net income would have been Rp 109.9
billion higher in 1999, and Rp 133.7 billion lower in 2000.
Equity in Net Income of Investees

The amount of the net income of investees recognized by the Company under Indonesian GAAP
diÅered from the amount that would be recognized under U.S. GAAP, primarily as a result of
depreciation of foreign exchange losses capitalized to assets acquired in foreign currencies by the
investees in previous years. As a result, on a U.S. GAAP basis, the Company's net income would have
been Rp 74.7 billion higher in 1999 and Rp 2.4 billion higher in 2000.
Pensions
Under Indonesian GAAP, prior service cost related to the increase in pension beneÑts for
pensioners is required to be charged directly to expense when incurred. In 1994 and 1999, the Company
increased pension beneÑts. For U.S. GAAP purposes, under the provisions of SFAS 87, however, such
prior service cost should be deferred and amortized systematically over future periods. The amount of
the diÅerence was Rp 70.5 billion higher in 1999 and Rp 94.6 billion higher in 2000 under U.S. GAAP
reporting.
Revaluation of Property, Plant and Equipment

While Indonesian GAAP does not generally allow companies to recognize increases in the value of
property, plant and equipment that occur subsequent to acquisition, an exception is provided for
revaluations made in accordance with government regulations. The Company revalued its property,
plant and equipment that were used in operation on January 1, 1979 and January 1, 1987. Under U.S.
GAAP, property, plant and equipment may not be stated at more than their historical acquisition cost.
Consequently, on a U.S. GAAP basis, the Company's net income would have been Rp 4.1 billion,
higher for 1998, 1999, and 2000, respectively.
Revenue Sharing Arrangements

Under Indonesian GAAP, property, plant and equipment built by an investor pursuant to a PBH
arrangement are recognized as property, plant and equipment in the books of the party to whom
ownership in such properties shall be transferred at the end of the revenue sharing period, with a
corresponding initial credit to unearned income. The property, plant and equipment are depreciated
over their useful lives while unearned income is amortized over the revenue sharing period. The
Company records its share of the revenues earned from these revenue sharing arrangements on a net
basis.
Under U.S. GAAP, the accounting treatment for revenue sharing arrangements depends on the
substance of the arrangement. When there is no guaranteed investment return to the investors, the
accounting treatment is similar to that under Indonesian GAAP. When there is a speciÑc guaranteed
investment return to the investors assets under revenue-sharing arrangements are recorded, and,
69
correspondingly, a liability representing the obligation under revenue sharing arrangements is re-
corded. A portion of the investor's share of revenue is recorded as interest expense based on such
speciÑed rate of return and the balance as a deduction of the obligation. Revenues earned are recorded
on a gross basis.
In connection with the diÅerent treatment of revenue sharing arrangements under U.S. GAAP and
Indonesian GAAP, the Company's income before tax on a U.S. GAAP basis would have been Rp 9.1
billion higher for 1998, Rp 11.9 billion higher in 1999, and Rp 23.3 billion lower in 2000.
Stock Issuance Costs
Under Indonesian GAAP, stock issuance costs are deferred and amortized over a period of time.
For U.S. GAAP purposes, the stock issuance costs are oÅset against the proceeds from the stock
issuance. As a result of this diÅerence, the Company's income before tax would be Rp 26.9 billion
higher for each of 1998 and 1999, and Rp 22.4 billion higher in 2000 under U.S. GAAP reporting.
The Company's net income calculated in accordance with U.S. GAAP was Rp 924 billion,
Rp 2,385.3 billion and Rp 2,497.2 billion, or 20.9% lower, 9.8% higher, and 1.6% lower than net income
calculated in accordance with Indonesian GAAP for 1998, 1999 and 2000, respectively. Stockholders'
equity calculated in accordance with U.S. GAAP for 1999 and 2000 was Rp 11,604.8 billion, and
Rp 13,026.3 billion or 5.1% lower, and 4.8% lower than stockholders' equity calculated in accordance
with Indonesian GAAP, respectively.
Item 12: Description of Securities Other than Equity Securities
Not applicable.
PART II
Item 13: Defaults, Dividend Arrearages and Delinquencies
The Company paid dividend to its shareholders yearly since 1996.
Item 14: Material ModiÑcations to the Rights of Security Holders and Use of Proceeds
Not applicable.
Item 15: Reserved

Item 16: Reserved
PART III
Item 17: Financial Statements
Not applicable. See Item 18.
Item 18: Financial Statements
The following Ñnancial statements, together with the report of ®TELKOM Auditors© thereon are
Ñled as part of this annual report.
70
PERUSAHAAN PERSEROAN (PERSERO) P.T. TELEKOMUNIKASI INDONESIA
INDEX TO FINANCIAL STATEMENTS
Page
Independent Auditors' Report ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-1

Consolidated Balance Sheets as of December 31, 1999 and 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-4
Consolidated Statements of Income for the Years Ended December 31, 1998, 1999 and 2000 ÏÏÏ F-6
Consolidated Statements of Changes in Equity for the Years Ended December 31, 1998, 1999
and 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 1998, 1999 and
2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-9
Notes to Consolidated Financial StatementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-11
Item 19: Exhibits

Not available
71
PERUSAHAAN PERSEROAN (PERSERO) P.T. TELEKOMUNIKASI INDONESIA
INDEX TO FINANCIAL STATEMENTS
Page
Independent Auditors' Report ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-1

Consolidated Balance Sheets as of December 31, 1999 and 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-4
Consolidated Statements of Income for the Years Ended December 31, 1998, 1999 and 2000 ÏÏÏ F-6
Consolidated Statements of Changes in Equity for the Years Ended December 31, 1998, 1999
and 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 1998, 1999 and
2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-9
Notes to Consolidated Financial StatementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-11
F-1
Independent Auditors' Report
No. 280201 TI LSW SA

The Stockholders, Board of Commissioners and Directors
Perusahaan Perseroan (Persero) P.T. Telekomunikasi Indonesia Tbk
We have audited the accompanying consolidated balance sheet of Perusahaan Perseroan (Persero)
P.T. Telekomunikasi Indonesia Tbk and its subsidiary as of December 31, 2000 and the related
consolidated statements of income, changes in equity, and cash Öows for the year then ended, all
expressed in Rupiah. These Ñnancial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these Ñnancial statements based on our audit. We did not
audit the Ñnancial statements of PT Telekomunikasi Selular (Telkomsel), the Company's investment in
which is accounted for by use of the equity method. The Company's equity of Rp 1,491,071 million in
Telkomsel's net assets at December 31, 2000 and of Rp 574,920 million in that company's net income for
the year then ended are included in the accompanying consolidated Ñnancial statements. The Ñnancial
statements of Telkomsel were audited by other auditors whose report, which expressed an unqualiÑed
opinion with explanatory paragraph concerning the eÅect of the economic conditions in Indonesia, has
been furnished to us, and our opinion insofar as it relates to the amounts included for Telkomsel, is
based solely on the report of such other auditors. The consolidated Ñnancial statements of the
Company and its subsidiary as of and for each of the two years in the period ended December 31, 1999
were audited by other auditors whose report, dated February 3, 2000, expressed an unqualiÑed opinion
on those statements, and included an explanatory paragraph concerning the eÅects of the economic
conditions in Indonesia on the Company and its subsidiary.
We conducted our audit in accordance with auditing standards established by the Indonesian
Institute of Accountants and generally accepted auditing standards in the United States of America.
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the Ñnancial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the Ñnancial statements. An audit also
includes assessing the accounting principles used and signiÑcant estimates made by management, as
well as evaluating the overall Ñnancial statement presentation. We believe that our audit and the report
of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audit and the report of the other auditors, the 2000 consolidated
Ñnancial statements present fairly, in all material respects, the Ñnancial position of Perusahaan
Perseroan (Persero) P.T. Telekomunikasi Indonesia Tbk and its subsidiary as of December 31, 2000,
and the results of their operations, changes in their equity, and their cash Öows for the year then ended
in conformity with generally accepted accounting principles in Indonesia.
As described in Note 37a to the consolidated Ñnancial statements, an investor in a Joint Operation
Scheme has recently asserted several claims against the Company. The investor has not asserted these
claims in any legal proceeding; instead it has asserted them only through correspondence and verbal
discussions.
Note 39 to the consolidated Ñnancial statements includes a summary of the eÅects the economic
conditions in Indonesia have had on the Company and its subsidiary, as well as measures the
Company and its subsidiary have implemented or plan to implement in response to the economic
conditions. The accompanying Ñnancial statements include the eÅects of the economic conditions to
the extent they can be determined and estimated.
Generally accepted accounting principles in Indonesia vary in certain respects with those in the
United States of America. A description of the signiÑcant diÅerences between those two generally
accepted accounting principles and approximate eÅects of those diÅerences on the income for the year
ended December 31, 2000 and equity as of December 31, 2000 are set forth in Notes 43 and 44,
respectively, to the consolidated Ñnancial statements.
F-2
Our audit also comprehended the translation of Rupiah amounts into United States Dollar and, in
our opinion, such translation has been made in conformity with the basis stated in Note 3 to the
consolidated Ñnancial statements. Such U.S. Dollar amounts are presented solely for the convenience of
the readers.
HANS TUANAKOTTA & MUSTOFA
Ludovicus Sensi W, SE, MM, BAP

License No. 99.1.0705
February 28, 2001
F-3
PERUSAHAAN PERSEROAN (PERSERO) P.T. TELEKOMUNIKASI INDONESIA Tbk
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 2000
(Figures in tables are presented in millions of Rupiah and thousands of U.S. Dollar)
ASSETS
Notes 1999 2000
Rp Rp U.S.$ (Note 3)
CURRENT ASSETS
Cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2d,4,31 3,597,537 3,542,174 360,233
Temporary investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2e,5,31 1,319,535 3,870,990 393,673
Trade accounts receivable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2f,6,7,31
Related parties Ì net of allowance for doubtful

accounts of Rp 30,459 million in 1999 and
Rp 167,669 million in 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 484,461 685,856 69,751
Third parties Ì net of allowance for doubtful
accounts of Rp 203,819 million in 1999 and
Rp 186,602 million in 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 616,397 661,639 67,288
Other accounts receivable Ì net of allowance for
doubtful accounts of Rp 868 million in 1999 and
Rp 2,683 million in 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2f,31 56,268 115,098 11,705
Inventories Ì net of allowance for obsolescence of
Rp 51,929 million in 1999 and Rp 23,319 million in
2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2g,8 411,956 108,568 11,041
Prepaid expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2h,31 125,984 124,641 12,676
Total Current AssetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,612,138 9,108,966 926,367
NONCURRENT ASSETS
Long-term investments Ì net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2e,9 1,483,933 1,768,206 179,823
Property, plant and equipment Ì net of accumulated

depreciation of Rp 10,899,090 million in 1999 and
Rp 12,127,818 million in 2000ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2i,10 17,198,001 16,953,486 1,724,142
Property, plant and equipment under revenue-

sharing arrangements Ì net of accumulated
depreciation of Rp 666,384 million in 1999 and Rp
763,765 million in 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2j,11,34 630,890 533,509 54,257
Advances and others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2l,31 374,147 494,582 50,298
Advance payment for investment in

shares of stockÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9 Ì 14,000 1,424
Property not used in operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,143 7,472 760

Deferred stock issuance costs Ì net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2m 22,402 Ì Ì
Total Noncurrent Assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19,717,516 19,771,255 2,010,704
TOTAL ASSETS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26,329,654 28,880,221 2,937,071
See accompanying notes to consolidated Ñnancial statements which are an integral part of the
consolidated Ñnancial statements.
F-4
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 2000
LIABILITIES AND EQUITY

Notes 1999 2000
Rp Rp U.S.$ (Note 3)
CURRENT LIABILITIES
Trade accounts payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12,31
Related parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 392,190 375,475 38,185
Third parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 466,134 827,543 84,160
Other accounts payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 31 20,263 26,357 2,680
Taxes payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2q,13 626,941 338,956 34,471
Dividends payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,258 1,492 152
Accrued expensesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,31 1,079,533 836,030 85,023
Unearned incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 43,070 46,041 4,682
Advances from customers and suppliersÏÏÏÏÏÏÏÏÏÏÏÏÏ 31 86,034 119,218 12,124
Current maturities of long-term debt Ì related party 15,31 674,679 818,516 83,242
Total Current Liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,393,102 3,389,628 344,719
NONCURRENT LIABILITIES
Deferred tax liabilities Ì net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2q,26 1,535,237 1,767,215 179,723
Unearned income on revenue-sharing
arrangementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2j,11,34 437,641 299,409 30,449
Unearned initial investor payments under joint
operation scheme ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2k,19,33 168,842 153,493 15,610
Long-term debtÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,31
Two-step loans Ì related party, net of current
maturities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,644,008 8,852,652 900,300
Project cost payableÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 896,507 693,607 70,539
Total noncurrent liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,682,235 11,766,376 1,196,621
MINORITY INTEREST IN NET ASSETS OF
SUBSIDIARYÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2b 30,008 36,574 3,720
EQUITY
Capital stock Ì Rp 500 par value per Series A
Dwiwarna share and Series B Share
Authorized Ì 1 Series A Dwiwarna share and
39,999,999,999 Series B shares
Issued and fully paid Ì 1 Series A Dwiwarna share
and 10,079,999,639 Series B shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16 5,040,000 5,040,000 512,560
Additional paid-in capitalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17 1,073,333 1,073,333 109,156
DiÅerence due to change of equity in associated
companies ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2e,9 430,722 426,397 43,364
Unrealized loss on decline in value of securitiesÏÏÏÏÏÏ 2e,5 (159) (165) (17)
Translation adjustment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2c,9 162,299 177,114 18,012
Retained earnings
AppropriatedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28 171,719 193,442 19,673
Unappropriated ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,346,395 6,777,522 689,263
Total equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12,224,309 13,687,643 1,392,011
TOTAL LIABILITIES AND EQUITY ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26,329,654 28,880,221 2,937,071
F-5
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1998, 1999 AND 2000
(Figures in tables are presented in millions of Rupiah and thousands of U.S. Dollar, except
share and ADS data)
Notes 1998 1999 2000

Rp Rp Rp U.S.$ (Note 3)
OPERATING REVENUES
TelephoneÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2n,18 3,805,207 4,528,902 5,177,864 526,580
Revenue under Joint Operation
Scheme ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2k,2n,19,33 1,591,537 1,677,217 2,267,154 230,566
Interconnection revenues ÏÏÏÏÏÏÏÏ 2n,31 555,511 892,050 1,121,482 114,053
Other telecommunications services 2n,20 647,745 692,040 809,206 82,295
Total Operating RevenuesÏÏ 6,600,000 7,790,209 9,375,706 953,494
OPERATING EXPENSES
DepreciationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2i,2j,10,11 2,162,015 2,363,579 2,087,824 212,328
Personnel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2n,21 831,754 1,105,702 1,439,456 146,390
telecommunications servicesÏÏÏÏ 2n,22 501,392 822,033 1,009,472 102,662
General and administrativeÏÏÏÏÏÏÏ 2n,23 473,547 508,388 715,045 72,719
Marketing ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2n 31,570 47,044 86,586 8,806
Total Operating Expenses ÏÏ 4,000,278 4,846,746 5,338,383 542,905
OPERATING INCOME ÏÏÏÏÏÏÏÏÏÏÏÏ 2,599,722 2,943,463 4,037,323 410,589
OTHER INCOME (CHARGES)
Interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2d,2e,31 595,168 688,077 631,650 64,238
Equity in net income of associated
companiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2e,9,31 7,124 424,794 342,876 34,870
Gain (loss) on foreign
exchange Ì net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2c,38 (965,491) 280,176 (1,064,184) (108,226)
Interest expenseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24,31 (980,714) (1,487,430) (816,749) (83,062)
Others Ì net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 25 168,643 113,633 327,460 33,302
Other income (charges) Ì netÏÏÏÏ (1,175,270) 19,250 (578,947) (58,878)
INCOME BEFORE TAXÏÏÏÏÏÏÏÏÏÏÏÏ 1,424,452 2,962,713 3,458,376 351,711
TAX EXPENSE ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2q,26 (255,782) (777,047) (906,204) (92,159)
INCOME BEFORE MINORITY
INTEREST IN NET INCOME OF
SUBSIDIARY ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,168,670 2,185,666 2,552,172 259,552
MINORITY INTEREST IN NET
INCOME OF SUBSIDIARY ÏÏÏÏÏÏ 2b Ì (13,345) (13,161) (1,339)
NET INCOME ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,168,670 2,172,321 2,539,011 258,213
BASIC EARNINGS PER SHAREÏÏÏÏ 2r,27
Net income per shareÏÏÏÏÏÏÏÏÏÏÏÏ 125.21 225.24 251.89 0.03
Net income per ADS
(20 series B shares per ADS) ÏÏÏÏÏ 2,504.29 4,504.89 5,037.72 0.51
F-6
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Figures in tables are presented in millions of Rupiah)
DiÅerence due to
Change of Equity Unrealized Loss
Capital Additional in Associated on Decline in Translation Retained earnings Total
Description Notes Stock Paid-in Capital Companies Value of Securities Adjustment Appropriated Unappropriated Equity
Rp Rp Rp Rp Rp Rp Rp Rp
Balance as of January 1, 1998 ÏÏÏÏÏ 4,666,667 1,446,666 419,699 Ì Ì 148,511 2,956,920 9,638,463
Foreign currency translation of
PSN and CSM Ì net of deferred
tax eÅect of Rp 65,613 million ÏÏ 2c,9 Ì Ì Ì Ì 153,096 Ì Ì 153,096
Resolved during the Annual
General Meeting of the
Stockholders on April 17, 1998:
Declaration of cash dividend ÏÏÏ 28 Ì Ì Ì Ì Ì Ì (452,445) (452,445)
Appropriation for general
reserve ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28 Ì Ì Ì Ì Ì 11,311 (11,311) Ì
Net income for the yearÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì 1,168,670 1,168,670
F-7
Balance as of December 31, 1998 ÏÏ 4,666,667 1,446,666 419,699 Ì 153,096 159,822 3,661,834 10,507,784
Balance as of January 1, 1999 ÏÏÏÏÏ 4,666,667 1,446,666 419,699 Ì 153,096 159,822 3,661,834 10,507,784
DiÅerence due to change of equity
in Telkomsel and Satelindo Ì
net of deferred tax eÅect of
Rp 4,724 millionÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2e,9 Ì Ì 11,023 Ì Ì Ì Ì 11,023
Unrealized loss on decline in value
of securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2e,5 Ì Ì Ì (159) Ì Ì Ì (159)
tax eÅect of Rp 3,944 million ÏÏÏ 2c,9 Ì Ì Ì Ì 9,203 Ì Ì 9,203
Declaration of cash dividend ÏÏÏ 28 Ì Ì Ì Ì Ì Ì (475,863) (475,863)
Bonus shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1c,17 373,333 (373,333) Ì Ì Ì Ì Ì Ì
Balance as of December 31, 1999 ÏÏ 5,040,000 1,073,333 430,722 (159) 162,299 171,719 5,346,395 12,224,309
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Ì (Continued)
DiÅerence due to
Change of Equity Unrealized Loss
Capital Additional in Associated on Decline in Translation Retained earnings Total
Description Notes Stock Paid-in Capital Companies Value of Securities Adjustment Appropriated Unappropriated Equity
Rp Rp Rp Rp Rp Rp Rp Rp
Balance as of January 1, 2000 ÏÏÏÏÏ 5,040,000 1,073,333 430,722 (159) 162,299 171,719 5,346,395 12,224,309
DiÅerence due to change of equity
in Telkomsel and PSN Ì net of
deferred tax eÅect of Rp 1,853
million ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2e,9 Ì Ì (4,325) Ì Ì Ì Ì (4,325)
Unrealized loss on decline in value
of securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2e,5 Ì Ì Ì (6) Ì Ì Ì (6)
tax eÅect of Rp 6,349 million ÏÏÏ 2c,9 Ì Ì Ì Ì 14,815 Ì Ì 14,815
F-8
Declaration of cash dividend ÏÏÏ 28 Ì Ì Ì Ì Ì Ì (1,086,161) (1,086,161)
Balance as of December 31, 2000 ÏÏ 5,040,000 1,073,333 426,397 (165) 177,114 193,442 6,777,522 13,687,643
See accompanying notes to consolidated Ñnancial statements which are an integral part of the consolidated Ñnancial statements.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
1998 1999 2000
Cash Flows from Operating Activities
Cash receipts from operating revenues
Telephone ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,562,632 4,312,222 4,883,551 496,649
Minimum Telkom Revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,471,769 1,452,912 1,327,386 134,993
Interconnection Ì net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 767,197 983,911 1,252,742 127,402
Other telecommunications servicesÏÏÏÏÏÏÏÏÏÏ 483,553 600,130 771,480 78,458
Distributable KSO revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 193,677 176,966 623,307 63,389
Total cash receipts from operating
revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,478,828 7,526,141 8,858,466 900,891
Cash payments for operating expenses
Personnel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (735,328) (1,014,324) (1,281,503) (130,327)
telecommunications services ÏÏÏÏÏÏÏÏÏÏÏÏÏ (658,711) (840,192) (774,021) (78,717)
General and administrative ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (319,157) (275,974) (387,349) (39,393)
MarketingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (26,642) (37,821) (76,172) (7,746)
Total cash payments for operating
expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,739,838) (2,168,311) (2,519,045) (256,183)
Interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 578,503 696,625 665,686 67,699
Income tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (236,531) (227,578) (1,252,669) (127,394)
Interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (736,970) (1,419,297) (856,961) (87,152)
Other Ì net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (754,472) (157,666) 61,620 6,267
Net Cash Provided by Operating Activities ÏÏÏÏÏÏ 3,589,520 4,249,914 4,957,097 504,128
Cash Flows from Investing Activities
Proceeds from sale of marketable securities and
maturity of time deposits ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 390,472 1,160,690 5,118,034 520,496
Decrease (increase) in advances and others ÏÏÏ 111,744 (161,770) 139,761 14,214
Proceeds from sale of property, plant and
equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,411 5,338 5,950 605
Purchases of marketable securities and
placements in time deposits ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (92,000) (2,437,268) (7,682,827) (781,331)
Acquisitions of property, plant and equipment (1,493,717) (656,014) (793,918) (80,740)
Advance payment for investment in shares of
stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì (14,000) (1,424)
Increase in long-term investments ÏÏÏÏÏÏÏÏÏÏÏÏ (1,279) (14,077) Ì Ì
Net Cash Used in Investing Activities ÏÏÏÏÏÏÏÏÏÏÏ (1,079,369) (2,103,101) (3,227,000) (328,180)
Cash Flows from Financing Activities
Cash dividend paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (448,623) (475,559) (1,103,389) (112,213)
Repayment of long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (284,120) (610,037) (682,071) (69,365)
Net Cash Used in Financing Activities ÏÏÏÏÏÏÏÏÏÏ (732,743) (1,085,596) (1,785,460) (181,578)
F-9
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS Ì (Continued)
1998 1999 2000

Net Increase (Decrease) in Cash and Cash
Equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,777,408 1,061,217 (55,363) (5,630)
Cash and Cash Equivalents at Beginning of Year 758,912 2,536,320 3,597,537 365,863
Cash and Cash Equivalents at End of Year ÏÏÏÏÏÏ 2,536,320 3,597,537 3,542,174 360,233
SUPPLEMENTAL CASH FLOW
INFORMATION
Transactions not aÅecting cash Öows:
Increase in property under construction through
the incurrence of long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,722,705 972,548 580,584 59,044
Capitalization of borrowing costs during
construction
Foreign exchange diÅerential ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 236,358 (33,960) 175,489 17,847
Interest ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 40,465 6,493 62,534 6,360
Changes from equity transactions of associated
companies aÅecting the following accounts:
Investment in shares of stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 218,708 28,896 14,986 1,524
Translation adjustment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 153,096 9,203 14,815 1,507
Deferred tax liability ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 65,613 8,668 4,496 457
DiÅerence due to change of equity in
associated companiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 11,023 (4,325) (440)
Increase (decrease) in property, plant and
equipment and unearned income under
revenue-sharing arrangement ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 55,627 (7,442) Ì Ì
Adjustment of long-term receivable and the
related unearned incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 25,809 Ì Ì Ì
Transfer of advance payment to property, plant
and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,774 Ì Ì Ì
F-10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 2000, AND FOR EACH OF THE THREE YEARS IN THE PERIOD
ENDED DECEMBER 31, 2000
1. GENERAL
a. Establishment and General Information
Perusahaan Perseroan (Persero) P.T. Telekomunikasi Indonesia Tbk (""the Company'') was
originally a part of ""Post en Telegraafdienst'', which was established in 1884 under the framework of
Decree No. 7 dated March 27, 1884 of the Governor General of the Dutch Indies and published in the
State Gazette No. 52 dated April 3, 1884.
In 1991, based on Government Regulation No. 25 year 1991, the status of the Company was
changed into a state-owned limited liability corporation (""Persero''). The Company was established
based on notarial deed No. 128 dated September 24, 1991 of Imas Fatimah, S.H.. The Company's
articles of association have been amended several times, most recently by notarial deed No. 58 dated
April 23, 1997 of A. Partomuan Pohan, S.H., LL.M., to conform with Law No. 1 year 1995 on Limited
Liability Companies and Law No. 8 year 1995 on Capital Markets. The latest amendments were
approved by the Minister of Justice of the Republic of Indonesia in his decision letter No. C2-
7468.HT.01.04.Th.97 dated July 31, 1997.
The Company's principal business is the provision of domestic telecommunications services,
including telephone, telex, telegram, satellite, leased lines, electronic mail, mobile communication and
cellular services. In order to accelerate the construction of telecommunications facilities, to make the
Company a world-class operator, and to increase the technology as well as the knowledge and skills of
its employees, the Company has entered into agreements with investors to develop, manage and
operate telecommunications facilities under Joint Operation Scheme ®known as ""Kerja Sama Operasi''
or ""KSO'' (Note 33)©.
Under Law No. 3 year 1989 on Telecommunications which took eÅect on April 1, 1989, Indonesian
legal entities are allowed to provide basic telecommunications services in cooperation with the
Company as the domestic telecommunications organizing body (or ""badan penyelenggara''). Other
Indonesian legal entities are also allowed to individually provide non-basic telecommunications
services. In providing telecommunications services, these entities are required to obtain licenses from
the Minister of Communications of the Republic of Indonesia (the Ministry of Communications
assumed responsibility for the telecommunications sector from the now defunct Ministry of Tourism,
Post and Telecommunications in March 1998). Government Regulation No. 8 year 1993 concerning the
provision of telecommunications services, further regulates that cooperation which provides basic
telecommunications services can be in the form of joint venture, joint operation or contract manage-
ment and that the entities cooperating with the domestic telecommunications organizing body must
use the organizing body's telecommunications networks. If the telecommunications networks are not
available, the Government Regulation requires that the cooperation be in the form of a joint venture
that is capable of constructing the necessary networks.
The Minister of Tourism, Post and Telecommunications of the Republic of Indonesia, through his
two decision letters both dated August 14, 1995, reaÇrmed the status of the Company as the organizing
body for the provision of domestic telecommunications services. Further, eÅective from January 1, 1996,
the Company was granted the exclusive right to provide local wireline and Ñxed wireless services for a
minimum period of 15 years and the exclusive right to provide domestic long-distance telecommunica-
tions services for a minimum period of 10 years. The exclusive rights also apply to telecommunications
services provided for and on behalf of the Company through a Joint Operation Scheme (KSO). This
F-11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
grant of rights does not aÅect the Company's right to provide other domestic telecommunications
services.
Based on press release No. o5/HMS/JP/VIII/2000 dated August 1, 2000 from the Director General
of Post and Telecommunications and the correction thereto No. 1718/UM/VII/2000 dated August 2,
2000, the period of exclusive rights granted to the Company to provide local wireline and Ñxed wireless
services is shortened to August 2002 and to August 2003 for domestic long-distance telecommunica-
tions services. In return, new operators are required to pay compensation to the Company, the amount
of which is to be estimated by an independent appraiser. The Company is further granted the permit to
provide international telecommunications services eÅective August 2003.
On September 8, 1999, the Government issued Law No. 36 year 1999 on Telecommunications to
replace Law No. 3 year 1989. Under the new Law, which took eÅect from September 2000, telecommu-
nications activities cover:
‚ Telecommunications networks
‚ Telecommunications services
‚ Special telecommunications
National state-owned companies, regional state-owned companies, privately-owned companies
and cooperatives are allowed to provide telecommunications networks and services. Special telecom-
munications can be provided by individuals, government agencies and legal entities other than
telecommunications networks and service providers.
Under Law No. 36, activities which result in monopolistic practices and unhealthy competition are
prohibited. In relation with this law, Government Regulation No. 52 year 2000 was issued, which
provides that interconnection fee shall be charged to originating telecommunications network operator
where telecommunications service is provided by two or more telecommunications network operators.
The Company's head oÇce is located in Jalan Japati No. 1, Bandung, West Java. In 1996, Ñve of the
Company's seven regional divisions started to operate as separate units (known as ""KSO Units'')
under Joint Operation Scheme (Note 33).
According to Article 3 of the Company's articles of association:
1. The Company's objective, in its broadest sense, is the development, operation and
improvement of the quality of telecommunications services and improvement of the utilization of
the Company's resources.
2. To achieve the above objective, the Company will be involved in the following activities:
a. Planning, building, providing, owning, developing, operating and maintaining tele-
communications facilities to support the provision of telecommunications services.
b. Increasing the capability of telecommunications facilities in order to improve telecom-
munications services to the public.
c. Performing activities and other eÅorts in connection with the utilization and develop-
ment of the Company's resources, in its broadest sense, and optimizing the utilization of the
F-12
Company's property, plant and equipment, information system, education and training, and
repairs and maintenance facilities.
The Company had 37,705 employees as of December 31, 2000, including those in the KSO Units.
Based on the resolution of the Stockholders' Extraordinary Meeting, the minutes of which have
been notarized by deed No. 7 dated April 7, 2000 of A. Partomuan Pohan, S.H., LL.M., the composition
of the Company's board of commissioners from 2000 to 2001 is as follows:
President Commissioner : Bacelius Ruru

Commissioners : Noor Fuad
Purnomo Sidhi
Andi Siswaka Faisal
Rahardjo Tjakraningrat
Based on the resolution of the Stockholders' General Meeting, the minutes of which have been
notarized by deed No. 6 dated April 7, 2000 of the same notary, the composition of the board of
directors from 2000 to 2005 is as follows:
President Director : Muhammad Nazif

Directors : Mursyid Amal
TauÑk Akbar
Komaruddin Sastrakoesoemah
Kristiono
b. Consolidated Subsidiary
The Company has a 51% ownership interest in PT Infomedia Nusantara (""Infomedia''), a

company domiciled in Jakarta. Infomedia started commercial operations in 1995 and is engaged in
providing telecommunications information service and other information services in the form of
printed and electronic media. As of December 31, 2000, total assets of Infomedia amounted to
Rp 186,548 million.
The Company's equity interest in Infomedia has increased to 51% in September, 1999. Accordingly,
the accounts of Infomedia were consolidated with those of the Company starting in 1999.
c. Public OÅering of Shares of the Company
The Company's total number of shares immediately prior to its initial public oÅering was
8,400,000,000 which was made up of 8,399,999,999 series B shares and 1 series A Dwiwarna share, all of
which were owned by the State of the Republic of Indonesia. On November 14, 1995, the Government
sold the Company's shares through an initial public oÅering in Jakarta Stock Exchange and Surabaya
Stock Exchange. The shares oÅered consisted of 933,333,000 new series B shares and 233,334,000
series B shares owned by the State of the Republic of Indonesia. The share oÅering was also conducted
on the New York Stock Exchange and London Stock Exchange for 700 million series B shares owned by
the State of the Republic of Indonesia, which were converted to 35 million American Depositary Shares
(ADS). Each ADS represents 20 series B shares.
F-13
In December 1996, the Government of the Republic of Indonesia made a block-sale of 388 million
series B shares, and later in 1997, the Government distributed 2,670,300 series B shares as an incentive
for the stockholders not to sell their shares within one year from the date of the initial public oÅering.
In May 1999, the Government made a further block-sale of 898 million series B shares.
Under Law No.1 year 1995 on Limited Liability Companies, the minimum total par value of the
Company's issued shares of capital stock has to be 25% of the total par value of the Company's
authorized capital stock, or in the Company's case, Rp 5 trillion. To comply with the Law, it was
resolved at the Annual General Meeting of Stockholders on April 16, 1999 to increase the issued shares
of capital stock. The bonus shares were distributed to existing shareholders in August 1999.
As of December 31, 2000, all of the Company's series B shares have been listed on the Jakarta Stock
Exchange and Surabaya Stock Exchange and 44,960,509 ADS on the New York Stock Exchange and
London Stock Exchange.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Consolidated Financial Statement Presentation
The consolidated Ñnancial statements have been prepared in accordance with generally accepted
accounting principles in Indonesia (""Indonesian GAAP''), which diÅer in certain respects with
generally accepted accounting principles in the United States of America (""U.S. GAAP''). A description
of signiÑcant diÅerences and their approximate eÅects on net income and equity are set forth in
Notes 43 and 44, respectively. The consolidated Ñnancial statements also include certain additional
disclosures in order to conform more closely to the form and content of Ñnancial statements required by
the Securities and Exchange Commission of the United States of America (the ""U.S. SEC'') (Note 45).
The consolidated Ñnancial statements, except for the statements of cash Öows, are prepared under
the accrual basis of accounting. The reporting currency used in the preparation of the consolidated
Ñnancial statements is the Indonesian Rupiah, while the measurement basis used is the historical cost,
except for certain accounts which are measured on the bases described in the related accounting
policies.
The consolidated statements of cash Öows are prepared using the direct method with classiÑcations
of cash Öows into operating, investing and Ñnancing activities.
b. Principles of Consolidation
The consolidated Ñnancial statements include the Ñnancial statements of the Company and
Infomedia, a 51%-owned subsidiary. Intercompany balances and transactions including unrealized
gains or losses on intercompany transactions are eliminated to reÖect the Ñnancial position and the
results of operations of the Company and its subsidiary as one business entity.
c. Foreign Currency Transactions and Translation

The books of accounts of the Company and its subsidiary are maintained in Indonesian Rupiah.
Transactions during the year involving foreign currencies are recorded at the rates of exchange
prevailing at the time the transactions are made. At balance sheet date, monetary assets and liabilities
denominated in foreign currencies are adjusted to reÖect the rates of exchange prevailing at that date.
F-14
The resulting gains or losses are credited or charged to current operations, except for foreign exchange
diÅerentials that can be attributed to qualifying assets which are capitalized.
The exchange rates used for translation of monetary assets and liabilities denominated in foreign
currencies are the buying and selling rates published by Dow Jones Telerate in 1999 and the Bridge
Telerate in 2000. The Dow Jones Telerate buying and selling rates, applied respectively to monetary
assets and liabilities, were Rp 7,070 and Rp 7,150 to U.S.$1 as of December 31, 1999, while the Bridge
Telerate buying and selling rate applied respectively to monetary assets and liabilities were Rp 9,575
and Rp 9,675 to U.S.$1 as of December 31, 2000. The Company does not guarantee that assets and
liabilities denominated in foreign currencies can be translated to Indonesian Rupiah at the rates of
exchange as of December 31, 2000.
The books of accounts of PT PasiÑk Satelit Nusantara and PT Citra Sari Makmur, associated
companies, are maintained in U.S. Dollar. For the purpose of reporting these investments using the
equity method, the assets and liabilities of these companies as of balance sheet date are translated into
Rupiah using the rates of exchange prevailing at that date, while revenues and expenses are translated
at the average rates of exchange for the year. The resulting translation adjustments are shown as part of
equity as ""Translation Adjustment''.
d. Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and in banks and all unrestricted investments
with maturities of three months or less from the date of placement.
CertiÑcates of the Bank Indonesia are stated at face value less unamortized discount.
e. Investments
Time deposits
Time deposits with maturities of more than three months are presented as temporary investments
and are stated at nominal values.
Investments in available for sale securities

Investments in available for sale securities are stated at fair value. Unrealized gains or losses from
the increase or decrease in fair value are recorded as part of equity and recognized as income or
expenses of the period when realized.
Investments in associated companies

Investments in shares of stock with ownership interest of 20% to 50%, directly or indirectly owned,
are accounted for using the equity method whereby the Company's proportionate share in the income
or loss of the associated company after the date of acquisition is added to or deducted from, and the
dividends received are deducted from, the acquisition cost of the investments. Equity in net income or
losses is adjusted for the straight-line amortization, over Ñve years, of goodwill. The carrying amount of
the investments is written down to recognize any permanent declines in the value of individual
investments. Any such write downs are charged directly to current operations.
F-15
Other investments
Investments in shares of stock with ownership interest of less than 20% that do not have readily
determinable fair values and are intended for long-term investments are stated at cost. The carrying
amount of the investments is written down to recognize a permanent decline in the value of the
individual investments. Any such write downs are charged directly to current operations.
Change of equity in associated companies
Changes in the value of investments due to changes in the equity of associated companies arising
from capital transactions of such associated companies with other parties are recognized in equity as
""DiÅerence Due to Change of Equity in Associated Companies'', and recognized as income or expenses
in the period the investments are disposed of.
f. Allowance for Doubtful Accounts
Allowance for doubtful accounts is provided based on a review of the status of the individual
receivable accounts at the end of the year.
g. Inventories
Inventories are stated at cost or net realizable value, whichever is lower. Cost is determined using
the weighted average method.
h. Prepaid Expenses
Prepaid expenses are amortized over their beneÑcial periods using the straight-line method.
i. Property, Plant and Equipment
Property, plant and equipment are stated at cost, except for certain revalued assets, less accumu-
lated depreciation.
Most of the Company's property, plant and equipment acquired up to January 1, 1979 and
January 1, 1987 have been revalued in accordance with Decree No. 109/KMK.04/1979 dated March 27,
1979 of the Minister of Finance of the Republic of Indonesia and Government Regulation No. 45 of
1986, respectively. The revaluation increments of Rp 86,787 million resulting from the 1979 revaluation
and Rp 381,908 million resulting from the 1987 revaluation were capitalized to capital stock in 1984 and
1988, respectively. Acquisitions after January 1, 1987 are stated at cost.
F-16
Depreciation is computed using the straight-line method based on the estimated useful lives of the
assets as follows:
Years
Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5-15
Telegraph, telex and data communication equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5-15
Transmission installation and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5-20
Satellite, earth station and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5-15
Cable network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5-15
Power supply ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5-10
Data processing equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5-10
Other telecommunications peripherals ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5
OÇce equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5
Vehicles ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5
Other equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5
Land is stated at cost and is not depreciated. Unused property, plant and equipment are stated at
the lower of carrying value or net realizable value.
When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is
written down to its estimated recoverable amount, which is determined as the higher of net selling
price or value in use.
The cost of maintenance and repairs is charged to operations as incurred; expenditures which
extend the useful life of the asset or result in increased future economic beneÑts such as increase in
capacity and improvement in the quality of output or standard of performance are capitalized. When
assets are retired or otherwise disposed of, their carrying values and the related accumulated
depreciation are removed from the accounts and any resulting gain or loss is reÖected in the current
operations.
Computer software used for data processing is added to the value of the computer hardware to
which it is attributed.
Property under construction is stated at cost which includes all borrowing costs during construc-
tion on debts incurred to Ñnance the construction. Gain on foreign exchange that can be attributed to
the property under construction is adjusted to the foreign exchange diÅerential and capitalized as a
borrowing cost. Property under construction is transferred to the respective property, plant and
equipment account when completed and ready for use.
j. Revenue-Sharing Arrangements
Under Indonesian Statement of Financial Accounting Standards (""PSAK'') No. 35, ""Accounting
for Income from Telecommunications Services'', assets under revenue-sharing arrangements are to be
capitalized by the party (the organizing body) to whom ownership of such assets shall be transferred
at the end of the revenue-sharing period, if the following criteria are met:
‚ There is a certainty that the organizing body will acquire the assets, the ownership of which
will be transferred at the end of the revenue-sharing period.
F-17
‚ The organizing body will be free from any claims from third parties with respect to the
acquisition of such assets.
‚ The agreement covering the revenue-sharing arrangements is irrevocable.
The Company records such assets as ""Property, Plant and Equipment under Revenue-Sharing
Arrangements'' (with a corresponding initial credit to ""Unearned Income under Revenue-Sharing
Arrangements'' presented under Liabilities) based on the costs incurred by the investors as agreed
upon in the contracts entered into by the Company and the investors (Notes 11 and 34). The property,
plant and equipment are depreciated over their estimated useful lives using the straight-line method.
Property, plant and equipment and unearned income are recorded at the beginning of the revenue-
sharing period. The unearned income related to the acquisition of the property, plant and equipment
under revenue-sharing arrangements is amortized over the revenue-sharing period using the straight-
line method.
At the end of the revenue-sharing period, the respective property, plant and equipment under
revenue-sharing arrangements are reclassiÑed to the ""Property, Plant and Equipment'' account. When
property, plant and equipment under revenue-sharing arrangements are acquired by the Company
before the end of the revenue-sharing period, the net book value of the assets is reclassiÑed to the
""Property, Plant and Equipment'' account, and the balance of the related unearned income is reÖected
as gain or loss in the current operations.
Revenue earned under revenue-sharing arrangements is recognized on the basis of the Company's
share as provided in the agreement.
k. Joint Operation Schemes

For the operations of telecommunications facilities and the provisions of telecommunications
services which have been transferred by the Company to the Ñve KSO Investors (Note 33), the
Company recognizes the following income in lieu of the traditional revenue and expense accounts:
amortization of unearned initial investor's payments, Minimum Telkom Revenues (MTR) and the
Company's share of distributable KSO revenue.
The unearned initial investor payments received as compensation from the KSO Investors are
presented net of all direct costs incurred in connection with the preparation of the KSO and are
amortized over the KSO period using the straight-line method for 15 years starting January 1, 1996.
MTR are recognized on a monthly basis based on the calculation of the contracted MTR amount
for the current year, in accordance with the KSO agreement.
The Company's share of distributable KSO revenues is recognized on the basis of the agreed
Company's percentage share of the KSO revenues, net of MTR and operational expenses of the KSO
Units, as provided in the KSO agreements.
Under PSAK No. 39, ""Accounting for Joint Operation Scheme'', which supersedes paragraph 14 of
PSAK No. 35, the assets built by the KSO Investors under the Joint Operation Scheme should be
recorded in the books of the KSO Investors which operate the assets and shall be transferred to the
Company at the end of the KSO period.
F-18
l. Deferred Charges for Landrights

Expenses related to the legal processing of landrights are deferred and amortized using the
straight-line method over the legal term of the landright which is shorter than its economic life.
m. Deferred Stock Issuance Costs

Stock issuance costs were deferred and amortized over Ñve years using the straight-line method.
n. Revenue and Expense Recognition

Revenue from installations is recognized at the time the installations are placed in service. Revenue
from usage charges is recognized as the charges are incurred by customers.
Revenues from network interconnection with other domestic and international telecommunica-
tions carriers are recognized as incurred and are presented on a net basis.
Revenues under Joint Operation Scheme are recognized as discussed in Note 2k.
Revenues under Revenue-Sharing Arrangements are recognized as discussed in Note 2j.
Expenses are recognized when incurred.
o. Pension Plan
The Company established a deÑned beneÑt pension plan covering all its permanent employees.
Current service cost is charged to operations in the current period. Past service cost, actuarial
adjustments and the eÅect of changes in assumptions for active participants are amortized using the
straight-line method over the estimated average residual employment period that has been determined
by the actuary.
The method used by the actuary for actuarial calculation is the Projected-Unit Credit method.
p. Postretirement Health Care Plan

The Company recognizes the cost of providing postretirement health care plan beneÑts over the
working lives of its employees based on actuarial computations. This practice is similar to that provided
by Statement of Financial Accounting Standards No. 106, ""Employers' Accounting for Postemployment
BeneÑts Other than Pensions'' (""SFAS 106''), of U.S. GAAP.
q. Income Tax
Current tax expense is determined based on the taxable income for the year computed using
prevailing tax rates.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to
diÅerences between the Ñnancial statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax liabilities are recognized for all taxable temporary diÅerences and
deferred tax assets are recognized for deductible temporary diÅerences to the extent that it is probable
that taxable income will be available in future periods against which the deductible temporary
diÅerences can be utilized.
F-19
Deferred tax is calculated at the tax rates that have been enacted or substantively enacted by the
balance sheet date. Deferred tax is charged or credited in the statement of income, except when it
relates to items charged or credited directly to equity, in which case the deferred tax is also charged or
credited directly to equity.
Deferred tax assets and liabilities are oÅset in the balance sheet, except if these are for diÅerent
legal entities, in the same manner the current tax assets and liabilities are presented.
r. Earnings per Share and Earnings per American Depositary Share (""ADS'')
Basic earnings per share is computed by dividing net income by the weighted average number of
shares outstanding during the year. Net income per ADS is computed by multiplying basic earnings per
share by 20, the number of shares represented by each ADS.
s. Segment information
Segment information is prepared in conformity with the accounting policies adopted for preparing
and presenting the consolidated Ñnancial statements.
3. TRANSLATION OF RUPIAH INTO UNITED STATES DOLLARS

The Ñnancial statements are stated in Rupiah. The translations of Rupiah amounts into United
States Dollar are included solely for the convenience of the readers and have been made using the
average of the market buying and selling rates of Rp 9,833 to U.S.$1 published by Bridge Telerate on
February 28, 2001. The convenience translations should not be construed as representations that the
Rupiah amounts have been, could have been, or could in the future be, converted into United States
Dollar at this or any other rate of exchange.
4. CASH AND CASH EQUIVALENTS

1999 2000
Rp Rp
Cash on hand ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,717 2,787
Cash in banks
Related parties
Rupiah
Bank Mandiri ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,641 93,893
Bank Negara Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,701 59,674
Bank Rakyat Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,288 20,618
Bank Pos Nusantara ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,251 1,938
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 42,881 176,123
Foreign currencies
Bank Mandiri ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 937 17,621
Bank Negara Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 708 328
Bank Rakyat Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9 8
Total Ì related parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 44,535 194,080
F-20
1999 2000
Rp Rp
Third parties
Rupiah
Bank Bukopin ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28 434
Bank Niaga ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 306
Bank Central Asia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29 287
Bank Internasional IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7 77
Standard Chartered Bank ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 42
Bank Dai-Ichi Kangyo IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10 11
Bank Duta ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 36 10
Citibank ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24 6
American Express BankÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 6
Bank Universal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8 Ì
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 156 1,179
Foreign currencies
Citibank ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9 105
American Express BankÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 105
Bank Dai-Ichi Kangyo IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8 66
Bank Niaga ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6 48
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 32 324
Total Ì third parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 188 1,503
Total cash in banks ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 44,723 195,583
CertiÑcates of Bank Indonesia
Face value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 600,000
Unamortized discount ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (2,624)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 597,376
Time deposits
Related parties
Rupiah
Bank Mandiri ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,168,512 1,071,732
Bank Negara Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 786,515 446,810
Bank Rakyat Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50,000 404,558
Bank Tabungan Negara ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 150,690 204,950
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,155,717 2,128,050
Foreign currencies
Bank Mandiri ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 336,816 200,023
Bank Negara Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 179,531
Bank Rakyat Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 34,949
Total Ì related parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,492,533 2,542,553
F-21
1999 2000
Rp Rp
Third parties
Rupiah
Bank Danamon Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 57,510
Bank Niaga ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,450 44,700
Bank Panin ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 32,000
Bank Universal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,500 20,000
Bank Bukopin ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,425 16,950
Bank MegaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 13,400
Bank Internasional IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,354 2,650
Standard Chartered Bank ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 1,525
Bank Duta ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,000 Ì
Bank Central Asia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,000 Ì
Citibank ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 250 Ì
Foreign currencies
Bank Internasional IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,130 11,973
Bank Niaga ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 745 2,687
Bank Dai-Ichi Kangyo IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 480
Total Ì third parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 55,564 203,875
Total time depositsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,548,097 2,746,428
Total Cash and Cash EquivalentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,597,537 3,542,174
1999 2000
Interest rates per annum

CertiÑcates of Bank Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 14.125%-14.625%
Time deposits
Rupiah ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7%-42% 12.52%-14.33%
Foreign currencies ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.13%-13% 5%-6.84%
F-22
5. TEMPORARY INVESTMENTS
1999 2000
Rp Rp
Time deposits
Related parties Ì Rupiah
Bank Mandiri ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,149,988 1,828,017
Bank Tabungan Negara ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 1,023,268
Bank Negara IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 166,590 1,010,989
Total Ì related parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,316,578 3,862,274
Third parties
Rupiah
Bank Bukopin ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,114 3,000
Bank Yudha Bhakti ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 1,000
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,114 4,000
United States Dollar
Bank Dai-Ichi Kangyo Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 2,879
Total Ì third parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,114 6,879
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,317,692 3,869,153
Available for sale securities
Investments in mutual fund (Reksa Dana Seruni)
At cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,002 2,002
Unrealized loss on decline in value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (159) (165)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,843 1,837
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,319,535 3,870,990
Interest rates per annum on time deposits
Rupiah ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13%-35% 11.14%-14.33%
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 5.125%
Time deposits have terms of more than three months to two years
The time deposit of subsidiary in Bank Dai-Ichi Kangyo Indonesia amounting U.S.$300,000 is used
as a guarantee for the Letter of Credit facility granted by the bank for the payment of subsidiary's
foreign suppliers.
The subsidiary has time deposits amounting to Rp 6,714 million in Bank Bukopin which is used as
a guarantee for the capital credit facility extended by the bank to Koperasi Infomedia Nusantara
(KOPIN). The KOPIN credit facility is used among others to Ñnance loans to subsidiary's employees.
The credit facility has a maximum amount of Rp 7.5 billion and a three-year term, due in 2003. As of
December 31, 2000 the time deposit is recorded as other assets.
Investments in mutual fund represent mutual fund certiÑcates-Seruni issued by PT (Persero)

Danareksa which earn dividends on a monthly basis. The carrying value of these investments as of
December 31, 1999 and 2000 represents the net assets value as of these dates.
F-23
Investments placed with related parties have similar interest rates, terms and conditions as those
placed with third parties.
6. TRADE ACCOUNTS RECEIVABLE Ì RELATED PARTIES

a. By Debtor
1999 2000
Rp Rp
KSO Units ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 278,458 503,187
Government agencies ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 116,459 119,304
PT Komunikasi Selular IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 55,593 90,681
PT Citra Sari MakmurÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 42,070
PT Napsindo Primatel Internasional ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 31,956
PT Mobile Selular Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,000 27,298
PT Metro Selular Nusantara ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18,165 21,419
PT Aplikanusa Lintasarta ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,257 6,345
PT Radio Telepon Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,832 4,868
PT Patra Telekomunikasi IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 4,152
PT Gratika ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 248 228
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,908 2,017
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 514,920 853,525
Allowance for doubtful accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (30,459) (167,669)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 484,461 685,856
Trade accounts receivable from certain related parties are presented net of the Company's
liabilities to such parties.
b. By Age Category
1999 2000
Rp Rp
0 to 6 months ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 476,096 680,631
7 to 12 months ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,036 121,972
13 to 24 months ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,868 20,668
More than 24 months ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,920 30,254
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 514,920 853,525
Allowance for doubtful accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (30,459) (167,669)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 484,461 685,856
F-24
c. By Currency
1999 2000
Rp Rp
Rupiah ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 495,451 753,620
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19,469 99,905
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 514,920 853,525
Allowance for doubtful accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (30,459) (167,669)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 484,461 685,856
Changes in the allowance for doubtful accounts

1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 48,437 30,459
Additions (deductions)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (17,978) 137,210
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30,459 167,669
An allowance for doubtful accounts is provided at a certain percentage of the accounts that have
been overdue, and full provision on those related parties receivables with signiÑcant capital deÑcien-
cies. Management believes that the allowance for doubtful receivables from related parties is adequate
to cover possible losses on uncollectible accounts.
Management also believes that there are no signiÑcant concentrations of credit risk on these
receivables.
7. TRADE ACCOUNTS RECEIVABLE Ì THIRD PARTIES

a. By Debtor
1999 2000
Rp Rp
Residential and business customers ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 818,545 806,477
PT Saranaprima Raya Telemindo ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,432 9,106
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 239 32,658
F-25
b. By Age Category
1999 2000
Rp Rp
0 to 3 months ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 614,033 656,472
More than 3 months ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 206,183 191,769
c. By Currency
1999 2000
Rp Rp
Rupiah ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 799,801 819,055
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20,415 29,175
Singapore DollarÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 6
Malaysian Ringgit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 5
Changes in the allowance for doubtful accounts
1999 2000
Rp Rp
Additions (deductions)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 60,671 (17,217)
Management believes that the allowance for doubtful receivables from third parties is adequate to
cover possible losses on uncollectible accounts.
Management also believes that there are no signiÑcant concentrations of credit risk in third party
receivables.
F-26
8. INVENTORIES
1999 2000
Rp Rp
Components:
Cables and transmission installation spare partsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 38,194 34,660
Telephone terminals, cards and spare parts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,069 11,156
Other spare parts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,226 22,805
Allowance for obsolescence ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (10,225) (13,573)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 52,264 55,048
Modules:
Cables and transmission installation spare partsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 384,362 42,438
Telephone terminals, cards and spare parts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,882 20,641
Other spare parts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 152 187
Allowance for obsolescence ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (41,704) (9,746)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 359,692 53,520
Changes in the allowance for obsolescence of inventories are as follows:

1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,351 51,929
Additions (deductions)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 38,578 (28,610)
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 51,929 23,319
Management believes that the established allowance is suÇcient to cover possible losses from the
decline in inventory value due to obsolescence.
The Company did not insure its inventories at December 31, 1999 and 2000.
F-27
9. LONG-TERM INVESTMENTS Ì NET

1999 2000
Percentage of Carrying Percentage of Carrying
Domicile Ownership Amount Ownership Amount
Rp Rp
Equity method:
PT Telekomunikasi Selular ÏÏÏÏÏÏÏÏÏ Jakarta 42.72 965,908 42.72 1,491,071
PT Aplikanusa Lintasarta ÏÏÏÏÏÏÏÏÏÏÏ Jakarta 37.66 84,162 37.66 102,817
PT PasiÑk Satelit Nusantara ÏÏÏÏÏÏÏÏ Bekasi 22.57 133,273 22.57 77,625
PT Citra Sari MakmurÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Jakarta 25.00 47,740 25.00 66,386
PT Metro Selular Nusantara ÏÏÏÏÏÏÏÏ Surabaya 20.17 29,162 20.17 9,777
PT Patra Telekomunikasi IndonesiaÏÏ Jakarta 30.00 6,674 30.00 6,976
PT Indonusa Telemedia ÏÏÏÏÏÏÏÏÏÏÏÏ Jakarta 35.00 3,474 35.00 3,412
PT Multimedia Nusantara ÏÏÏÏÏÏÏÏÏÏ Jakarta 31.00 4,715 31.00 2,575
PT Napsindo Primatel Internasional Jakarta 32.00 480 32.00 2,390
PT Tangara Mitrakom ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Jakarta 25.00 282 25.00 232
PT Satelit Palapa Indonesia ÏÏÏÏÏÏÏÏÏ Jakarta 22.50 184,370 22.50 Ì
PT Menara Jakarta ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Jakarta 20.00 7,161 20.00 Ì
PT Mobile Selular Indonesia ÏÏÏÏÏÏÏÏ Jakarta 25.00 Ì 25.00 Ì
PT Komunikasi Selular IndonesiaÏÏÏÏ Jakarta 35.00 Ì 35.00 Ì
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,467,401 1,763,261
Cost method:
PT Telekomindo Primabhakti ÏÏÏÏÏÏÏ Jakarta 9.00 90,000 9.00 90,000
PT Radio Telepon Indonesia ÏÏÏÏÏÏÏÏ Jakarta 12.86 11,695 12.86 11,695
PT Batam Bintan TelekomunikasiÏÏÏÏ Batam 5.00 587 5.00 587
PT Bangtelindo ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Bandung 3.18 199 3.18 199
Medianusa Pte. Ltd.ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Singapore Ì Ì 18.50 108
Investment in convertible bonds Ì
PT Aplikanusa Lintasarta ÏÏÏÏÏÏÏÏÏÏÏ Jakarta Ì 4,051 Ì 4,051
Decline in value of investments ÏÏÏÏÏÏÏ (90,000) (101,695)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,532 4,945
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,483,933 1,768,206
PT Telekomunikasi Selular (""Telkomsel'')

Telkomsel is engaged in providing telecommunications facilities and GSM mobile cellular services
with national coverage.
Telkomsel received noncash capital contributions from its stockholders in 1999 and 2000, and also
allocated a certain percentage of the 1999 net income as a bonus distribution to its employees in 2000.
The carrying amount of the Company's investment in Telkomsel was adjusted to reÖect the eÅect
of the change in Telkomsel's equity resulting from such transactions.
F-28
1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 686,501 965,908
Equity in net income of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 287,677 574,920
Dividends received ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (8,629) (42,795)
DiÅerence due to change of equity in associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 359 (6,962)
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 965,908 1,491,071
PT Aplikanusa Lintasarta (""Lintasarta'')

Lintasarta is a data communication operator and network application services company.
Lintasarta provides Packet Switched Data Network (""PSDN''), Very Small Aperture Terminal
(""VSAT'') data, Electronic Mail (""E-Mail''), and Digital Data Networks (""DDNs'') services. Lintasarta
also supplies Data Over Voice (""DOV'') digital equipment and network application facilities for
Indonesia's oÇcial electronic bank reporting system, shared Automated Teller Machine (""ATM'')
system, a money market information system, and a regional processor for the Society for Worldwide
Interbank Financial Telecommunications (""SWIFT'') system in Indonesia.
In April 1996, the Company purchased from Lintasarta 3,000 convertible bonds with a nominal
value of Rp 1 million per unit. The bonds will mature in 2001 and earn interest at the average annual
rate for three-month period of time deposits from the largest state-owned banks and three privately-
owned banks, plus 1%. The bonds are convertible upon maturity into Lintasarta's shares of stock at
their par value.
In June 1997, the Company increased its ownership in Lintasarta to 27.46% by acquiring 1,210
shares representing a 2.46% equity ownership and 295 convertible bonds which were previously owned
by PT Telekomindo Primabhakti (one of the stockholders of Lintasarta).
In November 1997, Lintasarta issued 7,344 new shares with a par value of Rp 1 million per share.
The issuance of the new shares decreased the ownership of the Company to 24.43%, since the
Company did not acquire its portion of the new shares.
In October 1998, the Company increased its ownership in Lintasarta to 32.53% by acquiring 13,945
shares with a par value of Rp 1 million per share.
In May 1999, the Company increased its ownership in Lintasarta to 33.43% by acquiring 836 shares
owned by ""Dana Pensiun Bapindo'' at Rp 2.5 million per share. At the same time, the Company also
purchased 104 convertible bonds at Rp 1 million each.
In August 1999, the Company increased its ownership in Lintasarta to 36.54% by acquiring 1,009
shares owned by ""Dana Pensiun Bank Bumi Daya'' and 1,881 shares owned by ""Dana Pensiun Bank
Dagang Negara'' at Rp 2.5 million per share. At the same time, the Company also purchased 223 and
211 convertible bonds from ""Dana Pensiun Bank Bumi Daya'' and ""Dana Pensiun Bank Dagang
Negara'', respectively, at Rp 1 million each.
In September 1999, the Company further increased its ownership in Lintasarta to 37.66% by
acquiring 1,040 shares owned by ""Dana Pensiun Bank Ekspor-Impor'' at Rp 2.5 million per share. At
the same time, the Company also purchased 218 convertible bonds at Rp 1 million each.
F-29
1999 2000
Rp Rp
Acquisition of 4,766 shares from other investorsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,619 Ì
Equity in net income of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,447 30,646
Dividends receivedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (7,720) (11,991)
PT PasiÑk Satelit Nusantara (""PSN'')

PSN is engaged in providing satellite transponder leasing and satellite-based communication
services in the Asia-PaciÑc Region.
1999 2000
Rp Rp
Equity in net loss of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (52,443) (60,328)
Translation adjustment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18,797 3,896
DiÅerence due to change of equity in associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 784
PT Citra Sari Makmur (""CSM'')

CSM is engaged in providing VSAT, net application services, consulting services on telecommuni-
cations technology and related facilities.
1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50,098 47,740
Equity in net income of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,291 1,378
Translation adjustment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (5,649) 17,268
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47,740 66,386
PT Metro Selular Nusantara (""Metrosel'')

Metrosel is engaged in providing national mobile cellular services and related facilities in Central
Java, Yogyakarta, East Java, Maluku and Irian Jaya. These services were previously provided by the
Company under the revenue-sharing arrangements with PT Centralindo Panca Sakti Cellular (a
company which has taken over the rights and obligations of PT Centralindo Panca Sakti or ""CPS'').
The Company's initial capital contribution of Rp 10,087 million represents a 20.17% ownership interest
and was made in the form of property, plant and equipment under the revenue-sharing arrangement
between the Company and CPS, over which the Company has the right of ownership upon
termination of such revenue-sharing arrangement.
In February 1997, Metrosel issued 1,250,000 new shares with a par value of Rp 10,000 per share to
Asia Link B.V. for U.S.$84,375 thousand. The issuance of the new shares has no impact on the
Company's ownership interest since the Company was granted 251,940 shares by the Company's
F-30
Pension Fund (formerly Yayasan Dana Pensiun Pegawai PT Telekomunikasi Indonesia/""YDPP

Telkom''), a stockholder of Metrosel.
1999 2000
Rp Rp
Equity in net loss of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2,951) (19,385)
PT Patra Telekomunikasi Indonesia (""Patrakomindo'')

Patrakomindo is engaged in providing satellite communication system services and related
facilities to the petroleum industry.
1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 6,674
Equity in net income of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,674 351
Dividend received ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (49)
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,674 6,976
PT Indonusa Telemedia (""Indonusa'')

Indonusa is engaged in providing multimedia telecommunications services.
In 2000, the Company acquired an additional 2,800,000 shares amounting to Rp 28,000 million, of
which Rp 14,000 million was paid in September 2000 and the remaining Rp 14,000 million was paid on
January 10, 2001. The Company recognized the payment made in 2000 as ""Advance Payment for
Investment in Shares of Stock'' which will be reclassiÑed to investment once the legal requirements for
the increase in Indonusa's issued capital are completed.
1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,286 3,474
Equity in net loss of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (812) (62)
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,474 3,412
PT Multimedia Nusantara (""Multimedia'')

Multimedia is engaged in providing pay-television and multimedia telecommunications services.
1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,397 4,715
Equity in net loss of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,682) (2,140)
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,715 2,575
F-31
PT Napsindo Primatel Internasional (""Napsindo'')

Napsindo is engaged in providing ""Network Access Point'' (NAP), ""Voice Over Data''
(VOD) and other related business.
The Company's investment of Rp 1,036 million in Napsindo representing 32% equity ownership,
had been fully paid by PT Infoasia Sukses Mandiri (ISM) based on a grant agreement between ISM
and the Company.
1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 480
Capital contribution ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,036 Ì
Equity in net income (loss) of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (556) 1,910
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 480 2,390
Based on the Deed of Napsindo's Resolution No. 104 dated October 31, 2000 which was notarized
by Ellize Asmawel, S.H., in relation with the increase in Napsindo's paid-in capital, the Company has
increased its investment in Napsindo to Rp 14,876 million in order to maintain its 32% ownership
interest. The increase in investment was eÅected through compensation of Napsindo's debt to the
Company.
As of December 31, 2000, the Company has not recorded the increase in investment as the legal
requirements for the increase in Napsindo's authorized and issued capital have not been fully
completed.
PT Tangara Mitrakom (""Tangarakom'')

Tangarakom is engaged in providing VSAT.
Based on a grant agreement dated December 26, 1997 between the Company and PT Prima
Tangara Citra (PTC), it was agreed that the Company's investment in Tangarakom amounting to
Rp 250 million, representing a 25% ownership interest, would be paid by PTC and Koperasi
Swadharma as donation to the Company. In 1999, PTC and Koperasi Swadharma made the payment in
the amount of Rp 217 million and Rp 33 million, respectively.
1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 282
Capital contribution ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 250 Ì
Equity in net income (loss) of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 32 (44)
Dividend received ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (6)
Ending balanceÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 282 232
Based on the Deed of Tangarakom's Resolution No. 122 dated November 29, 2000 which was
notarized by Agus Madjid, S.H., Tangarakom issued 1,500 new shares with par value of Rp 1 million
per share. The issuance of the new shares decreased the ownership of the Company to 10% since the
Company did not acquire its portion of the new shares.
F-32
As of December 31, 2000, the investment in Tangarakom was still accounted for using the equity
method as the legal requirements for the increase in Tangarakom's issued capital have not been fully
completed.
PT Satelit Palapa Indonesia (""Satelindo'')
Satelindo is engaged in providing GSM mobile cellular services, international telecommunications

services and satellite transponder leasing.
In 1999, the Company's investment in Satelindo was adjusted to reÖect the increase in additional
paid-in capital of Satelindo which resulted from grant contributions from DeTeMobil Deutsche
Telekom MobilNet Gmbh, one of its stockholders. The increase, net of deferred tax eÅect, is reÖected as
""DiÅerence Due to Change of Equity in Associated Company'' in the consolidated balance sheets.
1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 184,370
Equity in net income (loss) of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 168,982 (184,370)
DiÅerence due to change in equity in associated company ÏÏÏÏÏÏÏÏÏÏÏÏ 15,388 Ì
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 184,370 Ì
PT Menara Jakarta (""MJ'')
MJ intended to construct and operate building tower and related facilities. The economic diÇcul-
ties faced by Indonesia (Note 39) have resulted to the termination of MJ's construction projects at the
end of 1997.
1999 2000
Rp Rp
Beginning balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,026 7,161
Equity in net income of associated company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 135 Ì
Decline in value of investment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (7,161)
Ending balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,161 Ì
PT Mobile Selular Indonesia (""Mobisel'')
Mobisel is engaged in providing mobile cellular services and related facilities. These services were
previously provided by the Company under the revenue-sharing arrangements with PT Rajasa
Hazanah Perkasa (""RHP''). The capital contribution of the Company amounting to Rp 10,398 million,
which represents a 25% equity ownership, was made in the form of property, plant and equipment
under the revenue-sharing arrangements between the Company and RHP, over which the Company
has the right of ownership at the termination of the revenue-sharing arrangements.
At December 31, 1999 and 2000, the carrying amount of the Company's investment in Mobisel is
nil.
F-33
PT Komunikasi Selular Indonesia (""Komselindo'')
Komselindo is a joint-venture between the Company and PT Elektrindo Nusantara (""Elektrindo''),

and is engaged in providing analog mobile cellular services. These services were previously provided
by the Company under the revenue-sharing arrangements with Elektrindo.
Elektrindo transferred its property, plant and equipment acquired under the revenue-sharing
arrangements to Komselindo for Rp 188,195 million based on the appraised value and the agreement
among the Company, Elektrindo and Komselindo. This transaction is considered as a transaction
between entities under common control since Elektrindo owns 65% of Komselindo. The Company
recognized its equity in the loss from the diÅerence between the transfer price and the net book value,
to the extent of the amount of its investment in Komselindo.
As of December 31, 1999 and 2000, the carrying value of the investment in Komselindo is nil.
Based on the Deed of Komselindo's Resolution No. 110 dated October 10, 2000 which was
notarized by Ny. R. Arie Soetardjo, S.H., the Company agreed to the conversion of Rp 92,750 million of
receivable from Komselindo to equity in order to maintain a 35% ownership interest.
As of December 31, 2000, the Company has not recorded the conversion.
PT Telekomindo Primabhakti (""Telekomindo'')
Telekomindo is engaged in the construction and development of building and telecommunications

facilities.
1999 2000
Rp Rp
CostÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 90,000 90,000
Decline in value of investment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (90,000) (90,000)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì
PT Radio Telepon Indonesia (""Ratelindo'')
Ratelindo is engaged in providing facilities and telecommunications services using domestic Ñxed
wireless network.
The Company has recognized a loss due to decline in value of its investment as Ratelindo had a
capital deÑciency.
1999 2000
Rp Rp
CostÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,695 11,695
Decline in value of investment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (11,695)
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,695 Ì
F-34
PT Batam Bintan Telekomunikasi (""BBT'')

BBT is engaged in providing Ñxed line telecommunications services at Batamindo Industrial Park in
Muka Kuning, Batam Island and at Bintan Beach International Resort and Bintan Industrial Estate in
Bintan Island.
In June 1996, based on a cooperation agreement between the Company and PT Batamindo
Investment Corporation (""BIC''), the Company's investment in BBT was fully paid by BIC as BIC's
donation to the Company.
PT Bangtelindo
PT Bangtelindo is primarily engaged in providing consultancy services on the installation and
maintenance of telecommunications facilities.
Medianusa Pte. Ltd.

Medianusa Pte. Ltd. is an associated company of Infomedia, a subsidiary. Medianusa is engaged as
a sales agent, in search of advertisers for telephone directories.
The Company plans to restructure its investments in associated companies by selling its shares in
Tangarakom, MJ, Patrakomindo and Mobisel, based on the letters No. 115-118/KU830/ KUG-00/2000/
RHS, all dated November 28, 2000 which were addressed to the president directors of the respective
associated companies.
10. PROPERTY, PLANT AND EQUIPMENT

January 1, December 31,
1999 Additions(1&2) Deductions 1999
At cost or revalued amounts:

Land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 279,887 16,121 180,762 115,246
Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,391,434 28,842 42,906 1,377,370
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,640,033 97,595 232,150 6,505,478
Telegraph, telex and data communication
equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 221,587 Ì 261 221,326
Transmission installation and equipment ÏÏÏÏÏÏ 3,351,302 686,485 37,124 4,000,663
Satellite, earth station and equipmentÏÏÏÏÏÏÏÏÏ 1,802,450 1,304,011 46,001 3,060,460
Cable network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,519,968 949,925 35,704 8,434,189
Power supply ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 730,133 14,383 15,100 729,416
Data processing equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 680,541 48,101 24,835 703,807
Other telecommunications peripherals ÏÏÏÏÏÏÏÏ 937,060 19,856 495,818 461,098
OÇce equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 330,755 24,276 2,940 352,091
Vehicles ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 148,788 3,943 1,970 150,761
Other equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47,376 4,321 Ì 51,697
F-35

1999 Additions(1&2) Deductions 1999
Property under construction:

Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 84,714 14,858 25,693 73,879
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 275,880 321,100 149,625 447,355
Transmission installation and equipment ÏÏÏÏ 1,358,505 152,537 1,061,010 450,032
Satellite, earth station and equipmentÏÏÏÏÏÏÏ 963,518 418,981 1,281,657 100,842
Cable network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 746,106 747,327 714,707 778,726
Power supply ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 32,990 9,317 12,124 30,183
Data processing equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 48,119 17,356 19,031 46,444
Other telecommunications peripherals ÏÏÏÏÏÏ 4,923 13,210 12,105 6,028
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27,596,069 4,892,545 4,391,523 28,097,091
Accumulated depreciation:
Land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 43,197 16,015 59,212 Ì
Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 451,318 75,051 25,630 500,739
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,436,340 449,912 232,150 2,654,102
Telegraph, telex and data communication
equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 172,089 16,928 18 188,999
Transmission installation and equipment ÏÏÏÏÏÏ 1,288,414 152,052 37,124 1,403,342
Satellite, earth station and equipmentÏÏÏÏÏÏÏÏÏ 1,241,758 403,918 46,001 1,599,675
Cable network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,198,933 884,742 35,704 3,047,971
Power supply ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 441,768 74,649 15,099 501,318
Data processing equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 172,498 67,403 24,835 215,066
Other telecommunications peripherals ÏÏÏÏÏÏÏÏ 761,163 109,080 495,817 374,426
OÇce equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 228,953 48,572 2,940 274,585
Vehicles ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 96,985 19,427 1,938 114,474
Other equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,305 11,088 Ì 24,393
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,546,721 2,328,837 976,468 10,899,090
Net Book Value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18,049,348 17,198,001
(1) including reclassiÑcation from ""Property, Plant and Equipment under Revenue-Sharing Arrangements'' and reclassiÑcation
of computer software.
(2) including prior-period correction charged/credited to Other Expenses/Income
F-36

2000 Additions Deductions ReclassiÑcations 2000
At cost or revalued amounts:

Land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 115,246 3,465 Ì 22 118,733
BuildingsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,377,370 3,731 Ì 91,323 1,472,424
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏ 6,505,478 15,555 Ì 538,665 7,059,698
Telegraph, telex and data
communication equipment ÏÏÏÏÏ 221,326 200 Ì (14,934) 206,592
Transmission installation and
equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,000,663 6,823 2,384 227,133 4,232,235
Satellite, earth station and
equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,060,460 5,964 276,942 (285,118) 2,504,364
Cable networkÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,434,189 43,910 8,752 1,151,931 9,621,278
Power supply ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 729,416 6,826 2,337 77,607 811,512
Data processing equipment ÏÏÏÏÏÏ 703,807 155,459 Ì (9,874) 849,392
Other telecommunications
peripherals ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 461,098 27,451 146 8,534 496,937
OÇce equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 352,091 45,266 689 10,347 407,015
Vehicles ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 150,761 11,405 1,606 (2,585) 157,975
Other equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 51,697 7,077 Ì 2,748 61,522
Property under construction:
BuildingsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 73,879 118,370 Ì (135,453) 56,796
Switching equipment ÏÏÏÏÏÏÏÏÏÏ 447,355 417,599 Ì (555,846) 309,108
equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 450,032 31,794 Ì (237,675) 244,151
equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100,842 41,790 Ì (132,310) 10,322
Cable networkÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 778,726 747,974 Ì (1,183,878) 342,822
Power supply ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30,183 23,309 Ì (42,352) 11,140
Data processing equipment ÏÏÏÏ 46,444 65,542 Ì (10,181) 101,805
peripherals ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,028 11,923 Ì (12,468) 5,483
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28,097,091 1,791,433 292,856 (514,364) 29,081,304
BuildingsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 500,739 66,052 Ì (921) 565,870
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏ 2,654,102 467,647 Ì (12,153) 3,109,596
Telegraph, telex and data
communication equipment ÏÏÏÏÏ 188,999 9,521 Ì (2,675) 195,845
Cable networkÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,047,971 722,905 8,752 (33,516) 3,728,608
Power supply ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 501,318 70,086 2,337 (2,165) 566,902
Data processing equipment ÏÏÏÏÏÏ 215,066 97,932 Ì (16,066) 296,932
F-37

peripherals ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 374,426 45,998 146 (21,909) 398,369
OÇce equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 274,585 36,619 689 1,326 311,841
Vehicles ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 114,474 17,033 1,555 (2,218) 127,734
Other equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24,393 10,742 Ì 609 35,744
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,899,090 1,990,443 248,548 (513,167) 12,127,818
Net Book ValueÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,198,001 16,953,486
Depreciation charged to operations amounted to Rp 2,026,601 million, Rp 2,259,419 million and

Rp 1,990,443 million in 1998, 1999 and 2000, respectively.
Interest capitalized to property under construction amounted to Rp 116,766 million,

Rp 133,300 million and Rp 62,534 million in 1998, 1999 and 2000, respectively. Capitalization rates are
the borrowing rates on debts incurred related to property under construction.
Foreign exchange diÅerential capitalized as part of property under construction amounted to

Rp 336,777 million, (Rp 72,677) million and Rp 175,489 million in 1998, 1999 and 2000, respectively.
Management believes that no impairment in assets value contemplated in PSAK No. 48 concerning
""Impairment of Assets'' has occurred. For property, plant and equipment which are no longer used due
to technological change, obsolescence, or malfunction, an accelerated depreciation is employed and
such property, plant and equipment are then reclassiÑed to property not used in operation.
The Company and its subsidiary own several pieces of land located throughout Indonesia with
Building Use Right (Hak Guna Bangunan or HGB) for a period of 20 Ó 30 years which will expire
between 2001 Ó 2029. Management believes that there will be no diÇculty in the extension of the
landrights since all the parcels of land were acquired legally and supported by suÇcient evidence of
ownership.
Some of the Company's land measuring 1,401,181 m2 are still under the name of other parties
including, among others, the now defunct Ministry of Tourism, Post and Telecommunications and the
Ministry of Communication of the Republic of Indonesia. As of February 28, 2001, the transfer of the
legal title of ownership on those parcels of land to the Company is still in progress.
At December 31, 1999 and 2000, all property, plant and equipment, except land, were insured with
PT Asuransi Jasa Indonesia against Ñre, theft and other possible risks for Rp 14,089,462 million and
Rp 16,137,128 million, respectively, and an additional coverage for Palapa B4 and Telkom 1 Satellite for
U.S.$12,980 thousand at December 31, 1999 and U.S.$83,870 thousand at December 31, 2000. Manage-
ment believes that the insurance coverage is adequate to cover possible losses on the assets insured.
F-38
11. PROPERTY, PLANT AND EQUIPMENT UNDER REVENUE-SHARING ARRANGEMENTS

1999 Additions(*) Deductions 1999
At cost:
LandÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,160 Ì Ì 3,160
Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,782 10,170 Ì 23,952
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 640,862 78,602 Ì 719,464
Transmission installation and equipment 169,624 Ì Ì 169,624
Cable network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 326,511 13,618 Ì 340,129
Other telecommunication peripherals ÏÏÏ 135,893 Ì 94,948 40,945
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,289,832 102,390 94,948 1,297,274
LandÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 672 158 Ì 830
Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,384 3,749 Ì 7,133
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 206,119 92,025 Ì 298,144
Transmission installation and equipment 151,732 5,954 Ì 157,686
Cable network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 150,899 14,109 Ì 165,008
Other telecommunication peripherals ÏÏÏ 114,212 16,854 93,483 37,583
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 627,018 132,849 93,483 666,384
Net Book Value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 662,814 630,890
(*) including prior period adjustments which were charged/credited to Other Expense/Income

At cost:
Land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,160 Ì Ì Ì 3,160
Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 23,952 Ì Ì Ì 23,952
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏ 719,464 Ì Ì (92,948) 626,516
equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 169,624 Ì Ì (62,066) 107,558
Cable network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 340,129 Ì Ì (5,337) 334,792
peripherals ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 40,945 Ì Ì 160,351 201,296
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,297,274 Ì Ì Ì 1,297,274
F-39

Land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 830 158 Ì Ì 988
Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,133 1,198 Ì (133) 8,198
Switching equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏ 298,144 44,000 Ì (57,659) 284,485
equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 157,686 11,559 Ì (92,858) 76,387
Cable network ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 165,008 26,830 Ì 643 192,481
Other telecommunication
peripherals ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 37,583 13,636 Ì 150,007 201,226
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 666,384 97,381 Ì Ì 763,765
Net Book Value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 630,890 533,509
Depreciation charged to operations amounted to Rp 135,414 million, Rp 104,160 million and

Rp 97,381 million in 1998, 1999 and 2000, respectively.
Rights to the property, plant and equipment under revenue-sharing arrangements are legally
retained by the investors until the end of the revenue-sharing period (Note 34).
The details of unearned income under revenue-sharing arrangements are as follows:
1999 2000
Rp Rp
Gross amount ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,297,274 1,297,274
Accumulated amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (859,322) (997,865)
Cumulative eÅect of contract amendment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (311) Ì
Net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 437,641 299,409
12. TRADE ACCOUNTS PAYABLE

1999 2000
Rp Rp
Related parties
Payable to other telecommunications carriers ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 258,472 192,735
Purchases of equipment, materials and servicesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 49,896 130,795
Concession fees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26,690 33,913
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 57,132 18,032
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 392,190 375,475
Third parties
Purchases of equipment, materials and servicesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 335,541 682,908
Payable related to revenue-sharing arrangements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 103,506 118,899
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27,087 25,736
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 466,134 827,543
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 858,324 1,203,018
F-40
Trade accounts payable by currency are as follows:

1999 2000
Rp Rp
Rupiah ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 847,360 1,062,524
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 106,576
French FrancÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,350 26,070
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,614 6,790
Deutsche MarkÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 1,058
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 858,324 1,203,018
13. TAXES PAYABLE

1999 2000
Rp Rp
Corporate income tax (Note 26)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 503,980 118,009
Income taxes
Article 21 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19,865 40,539
Article 26 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,166 849
Property taxÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 193
Value Added Tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 87,157 123,450
The amount of Output VAT which has not been remitted to the State Treasury is reported in the
taxes payable account. Based on a circular letter No. SE-48/PJ.3/1988 dated December 31, 1988 of the
Director General of Taxation, the Company is not allowed to credit the Input VAT against the Output
VAT.
However, based on the letter from Director General of Taxation No. S-2023/PJ.53/2000 dated
October 24, 2000, the Company will be able to credit the Input VAT up to the balance which has not
been expensed starting from January 1, 2001.
VAT is applied on the provision of interconnection services between telecommunications compa-

nies starting from January 1, 2000 in accordance with the circular letter of the Director General of
Taxation No. SE-01/PJ.54/2000 dated January 19, 2000.
F-41
14. ACCRUED EXPENSES

1999 2000
Rp Rp
Postretirement beneÑt cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 272,650 371,603
Interest and bank charges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 385,479 269,933
Salaries and employees bonuses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 103,551 72,652
General, administrative and marketingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 93,427 64,024
Operation, maintenance and telecommunications servicesÏÏÏÏÏÏÏÏÏÏÏÏÏ 61,196 45,045
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 163,230 12,773
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,079,533 836,030
15. LONG-TERM DEBT

Two-Step Loan Ì related party
The recognition of two-step loans (loans which were obtained by the Government of the Republic
of Indonesia from overseas banks and a consortium of contractors which are then on-loaned to the
Company) is based on Withdrawal Authorization (""WA'') or other similar documents issued by the
lenders. The loans entered into up to July 1994 were recorded and are payable in Rupiah based on the
exchange rate at the date of withdrawal. Loans entered into after July 1994 are payable in their original
currencies and any resulting foreign exchange gain or loss is borne by the Company.
The details of the two-step loans are as follows:

Interest Rate
Creditors (%) 1999 2000
RP Rp
Overseas banks ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.10-13.91 7,875,346 9,239,333
Consortium of contractorsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.20-14.53 443,341 431,835
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,318,687 9,671,168
Current maturitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (674,679) (818,516)
Long-term portionÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,644,008 8,852,652
The loans originating from overseas banks are payable in various currencies except for
Rp 4,431,233 million in 1999 and Rp 4,048,905 million in 2000 which are payable in Rupiah. The loans
acquired are intended for and are attributable to the construction of certain property, plant and
equipment. The loans are payable in semi-annual installments and are due on various dates until 2025.
The loans originating from the consortium of contractors are payable in Japanese Yen except for
Rp 223,737 million in 1999 and Rp 196,947 million in 2000 which are payable in Rupiah. The loans
acquired are used to Ñnance the Company's second digital telephone exchange project. The loans are
payable in semi-annual installments and are due on various dates until 2015.
F-42
Each of the loans bears one of the following interest rates:

Ì Fixed rate.
Ì Average interest rate on 3-month term Bank Indonesia CertiÑcate during the last six-month
before the six-month period within which the installment falls due, plus 1%, the interest rate of
which is established by the Ministry of Finance through its periodic notice to the Company.
Ì Interest rate oÅered by lenders, plus 0.5%.
The annual interest rates charged on loans repayable in Rupiah range from 12.25% to 46.67% in
1999 and from 12.25% to 14.53% in 2000, on those repayable in U.S. Dollar range from 4% to 8.72% in
1999 and from 4% to 9.26% in 2000, and on those repayable in Japanese Yen range from 3.10% to 3.20%
in 1999 and 2000.
The unused portions of the credit facilities as of December 31, 2000 in U.S. Dollar, French Franc
and Japanese Yen amounted to U.S.$98,419 thousand, FRF 1,616 thousand and Í 5,931 million,
respectively.
The schedule of the required principal payments on the Company's long-term debt as of
December 31, 2000 is as follows:
Year 2000
Rp
2001 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 818,516
2006 Ó 2025 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,706,760
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,671,168
Project Cost Payable

This account represents the Company's liabilities to a number of contractors, denominated in
various currencies, except for Rp 109,719 million in 1999 and Rp 81,803 million in 2000 which are
denominated in Rupiah. These liabilities arise from contractor billings which have not been paid for by
the lender through the ""two-step loans'' discussed above.
At December 31, 2000, project cost payable to related parties amounted to Rp 12,606 million.
F-43
16. CAPITAL STOCK

1999 and 2000
Percentage of Total
Name of Stockholder Number of Shares Ownership (%) Paid-up Capital
Rp
Series A Dwiwarna share
State of the Republic of IndonesiaÏÏÏÏÏÏÏ 1 Ì Ì
Series B shares
State of the Republic of IndonesiaÏÏÏÏÏÏÏ 6,672,235,355 66.19 3,336,118
Public (below 5% each)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,407,764,284 33.81 1,703,882
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,079,999,640 100.00 5,040,000
At December 31, 2000, the Company's commissioners, directors, and employees owned a total of
24,210,919 Company's shares.
17. ADDITIONAL PAID-IN CAPITAL

1998 1999 2000
Rp Rp Rp
Proceeds from sale of 933,333,000 shares with par value of
Rp 2,050 per share through initial public oÅering in
1995 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,446,666 1,446,666 1,446,666
Capitalization into 746,666,640 series B shares in 1999 ÏÏÏÏ Ì (373,333) (373,333)
Balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,446,666 1,073,333 1,073,333
18. OPERATING REVENUES Ì TELEPHONE

1998 1999 2000
Rp Rp Rp
Local and domestic long-distance usage ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,902,565 3,570,891 4,097,093
Monthly subscription charges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 683,273 799,074 887,355
Installation charges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 105,854 68,277 75,382
Phone cardsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2,065) (8,645) 34,426
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 115,580 99,305 83,608
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,805,207 4,528,902 5,177,864
19. OPERATING REVENUES Ì REVENUE UNDER JOINT OPERATION SCHEME

1998 1999 2000
Rp Rp Rp
Minimum Telkom Revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,433,436 1,452,912 1,556,699
Share in distributable KSO revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 142,752 208,956 695,106
Amortization of unearned initial investor payments under
Joint Operation Scheme ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,349 15,349 15,349
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,591,537 1,677,217 2,267,154
F-44
Distributable KSO revenues represent the entire KSO revenues, net of MTR and operational
expenses of the KSO Units. These revenues are shared between the Company and the KSO Investors
based upon agreed percentages. Agreed percentages for revenue distribution between the Company
and KSO Investors for 1998 Ó 1999 and 2000 were 10%:90% and 30%:70%, respectively.
20. OPERATING REVENUES Ì OTHER TELECOMMUNICATIONS SERVICES

1998 1999 2000
Rp Rp Rp
Revenues under Revenue-Sharing Arrangements:
Net share in revenues earned under Revenue-Sharing
ArrangementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 126,932 151,973 170,133
Amortization of unearned income under Revenue-Sharing
ArrangementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 158,233 156,174 138,232
Leased lines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 104,596 100,475 193,869
Satellite transponder leaseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 208,270 215,790 183,255
Multimedia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24,596 35,407 65,164
Telex and telegram ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,899 13,078 7,498
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,219 19,143 51,055
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 647,745 692,040 809,206
21. OPERATING EXPENSES Ì PERSONNEL

1998 1999 2000
Rp Rp Rp
Salaries and related allowances ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 359,376 519,444 635,015
Vacation pay, incentives and other allowances ÏÏÏÏÏÏÏÏÏÏÏÏ 137,980 159,208 236,594
Employee income tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 67,434 109,885 172,943
Net periodic postretirement beneÑt costÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 107,997 121,541 165,103
Net periodic pension cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30,754 61,069 72,643
HousingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 44,212 43,067 65,401
Medical ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 31,403 38,332 52,941
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 52,598 53,156 38,816
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 831,754 1,105,702 1,439,456
F-45
22. OPERATING EXPENSES Ì OPERATION, MAINTENANCE AND

TELECOMMUNICATIONS SERVICES
1998 1999 2000
Rp Rp Rp
Distributors' and telephone kiosks' commissions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 107,396 242,909 372,258
Operation and maintenanceÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 192,334 227,413 309,596
Electricity, gas and water ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 76,998 75,821 102,935
Insurance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29,301 40,783 92,280
Concession fees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 42,971 52,028 50,467
Travel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,754 7,346 11,029
Radio frequency usage charges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,257 7,006 9,445
Franchise fee ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12,146 6,695 6,255
Cost of phone cardsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,163 292 2,195
Year 2000 remediation cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,534 142,702 1,228
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12,538 19,038 51,784
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 501,392 822,033 1,009,472
23. OPERATING EXPENSES Ì GENERAL AND ADMINISTRATIVE

1998 1999 2000
Rp Rp Rp
Provision for doubtful accounts and inventory obsolescence ÏÏÏÏÏÏÏÏÏÏÏ 97,223 161,973 278,960
Training, education and recruitment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 131,045 98,155 101,490
Collection expensesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 61,211 67,998 100,970
TravelÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29,623 38,742 49,217
Security and screening ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,123 22,294 34,707
Research and development ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12,347 12,598 33,110
Professional fees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28,054 10,177 30,748
Printing and stationery ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 25,167 24,963 26,700
Amortization of deferred stock issuance costsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26,883 26,883 22,402
Meetings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,339 14,094 16,326
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 36,532 30,511 20,415
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 473,547 508,388 715,045
24. INTEREST EXPENSE

1998 1999 2000
Rp Rp Rp
Interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,097,480 1,620,730 879,283
Interest capitalized to property under construction ÏÏÏÏÏÏÏÏÏ (116,766) (133,300) (62,534)
Charged to current operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 980,714 1,487,430 816,749
F-46
25. OTHER INCOME (CHARGES) Ì OTHERS Ì NET

1998 1999 2000
Rp Rp Rp
Income from Ñnes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 69,606 69,966 95,650
RentalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24,427 29,582 59,190
TrainingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,801 14,600 36,088
RepairsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20,992 24,455 28,003
Supporting facilities replacement ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,699 18,739 22,259
Collection service revenueÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,669 14,512 12,433
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 22,449 (58,221) 73,837
26. INCOME TAX
Tax expense of the Company and its subsidiary consists of the following:
1998 1999 2000
Rp Rp Rp
Current tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 159,153 613,897 677,250

Deferred tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 96,629 163,150 228,954
Current Tax
A reconciliation between income before tax per consolidated statements of income and taxable
income is as follows:
1998 1999 2000
Rp Rp Rp
Income before tax per consolidated statements of income 1,424,452 2,962,713 3,458,376
Minority interest in subsidiary's income before tax ÏÏÏÏÏÏÏ Ì (18,680) (21,087)
Income before taxÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,424,452 2,944,033 3,437,289
Temporary diÅerences:
Provision for doubtful accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 99,244 114,721 217,294
Provision for inventory obsolescenceÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2,021) 47,252 61,666
Provision for decline in value of securities ÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 90,000 18,856
Timing diÅerence of KSO Units ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,935 3,677 14,605
Amortization of deferred stock issuance costs ÏÏÏÏÏÏÏÏÏÏ 12,706 16,250 14,428
Equity in income of associated companies ÏÏÏÏÏÏÏÏÏÏÏÏÏ (7,124) (437,817) (356,575)
Depreciation of property, plant and equipment ÏÏÏÏÏÏÏÏ (330,233) (68,485) (349,114)
Gain on sale of property, plant and equipment ÏÏÏÏÏÏÏÏ (2,960) (78,322) (218,708)
Net periodic pension costs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (14,307) 45,062 (155,839)
Inventory written oÅ ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (11,473) (8,673) (3,992)
Amortization of landrights ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (2,885) (894)
F-47
1998 1999 2000

Rp Rp Rp
Accounts receivable written oÅ ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (47,289) (116,168) Ì
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (23,575) Ì Ì
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (322,097) (395,388) (758,273)
Nondeductible expenses (nontaxable income):
Net periodic postretirement beneÑt cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 121,541 165,103
Depreciation of property, plant and equipment under
Revenue-Sharing Arrangements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 135,414 104,161 97,381
Employees' beneÑts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 25,203 26,166 32,048
Repairs and maintenance on leased land/buildings ÏÏÏÏÏ 7,569 14,297 28,462
Non-deductible expenses of KSO Units ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (5,300) 6,157 17,256
Tax penalty ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 52,150 16,703
Interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (595,952) (687,757) (631,646)
Amortization of unearned income on Revenue-Sharing
Arrangements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (158,233) (156,174) (138,232)
Income from land/building rental ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (15,465) (29,412) (58,211)
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34,950 26,864 28,139
Taxable incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 530,541 2,026,638 2,236,019
The details of current tax expense and payable of the Company are as follows:
1998 1999 2000

Rp Rp Rp
Current tax expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 159,153 607,983 670,796
Less prepaid taxes
Income tax
Article 22 1,449 132 25
Article 23 8,798 14,006 14,283
Article 25 127,892 89,865 541,074
Current tax payable of the Company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 21,014 503,980 115,414
Subsidary ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 2,595
The taxable income and current tax payable of the Company and its subsidiary for 1999 are in
accordance with the corporate tax returns Ñled with the Tax Service OÇce.
In 2000, the Company received Tax Assessment Letters (SKP) from the Tax Service OÇce for its
corporate income tax for the years 1997 to 1999. The additional tax due was settled in December 2000
and the diÅerence between the recorded amount of tax liabilities/prepayments and the amount
assessed by the Tax Service OÇce was charged to current operations.
F-48
Deferred Tax
The details of the Company's deferred tax assets and liabilities are as follows:
January 1, Movements December 31, Movements December 31,
1999 for the Year 1999 for the Year 2000
Rp Rp Rp Rp Rp
Deferred tax assets:
Allowance for doubtful
accountsÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 62,578 35,465 98,043 69,496 167,539
Allowance for inventory
obsolescence ÏÏÏÏÏÏÏÏÏÏ 4,101 11,630 15,731 17,442 33,173
Allowance for decline in
value of securities ÏÏÏÏÏ Ì 27,000 27,000 5,657 32,657
Deferred stock issuance
costs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 2,848 2,848 4,328 7,176
Accrued postretirement
beneÑt cost ÏÏÏÏÏÏÏÏÏÏÏ 80,143 (80,143) Ì Ì Ì
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 208 (208) Ì Ì Ì
Total deferred tax assetsÏÏÏÏ 147,030 (3,408) 143,622 96,923 240,545
Deferred tax liabilities:
Depreciation of property,
plant and equipment ÏÏ (1,347,784) (44,043) (1,391,827) (170,346) (1,562,173)
Investment in shares of
stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (162,721) (140,014) (302,735) (111,469) (414,204)
Net periodic pension
costs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,664 13,904 16,568 (46,818) (30,250)
Landrights ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (865) (865) (268) (1,133)
Deferred stock issuance
costs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2,027) 2,027 Ì Ì Ì
Total deferred tax liabilities (1,509,868) (168,991) (1,678,859) (328,901) (2,007,760)
Net deferred tax liabilities ÏÏ (1,362,838) (172,399) (1,535,237) (231,978) (1,767,215)
A reconciliation between the total tax expense and the amounts computed by applying the
eÅective tax rates to income before tax is as follows:
1998 1999 2000
Rp Rp Rp
Income before tax per consolidated statements of income 1,424,452 2,962,713 3,458,376
Minority interest in subsidiary's income before tax ÏÏÏÏÏÏ Ì (18,680) (21,087)
Income before taxÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,424,452 2,944,033 3,437,289
F-49
1998 1999 2000

Rp Rp Rp
Tax expense at eÅective tax rates:
10% x Rp 25 millionÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2) (2) (2)
15% x Rp 25 millionÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4) (4) (4)
30% x Rp 1,424,402 million in 1998 Rp 2,943,983 million
in 1999 and Rp 3,437,239 million in 2000 ÏÏÏÏÏÏÏÏÏÏÏ (427,321) (883,195) (1,031,172)
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (427,327) (883,201) (1,031,178)
Tax eÅect of nontaxable income (nondeductible
expenses)
Interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 178,786 206,327 189,494
Amortization of unearned income under Revenue-
Sharing ArrangementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47,470 46,852 41,470
Income from land/building rental ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,640 8,824 17,463
Postretirement beneÑt cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (36,462) (49,531)
Depreciation of property, plant and equipment under
Revenue-Sharing Arrangements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (40,624) (31,248) (29,215)
Employee beneÑts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (7,561) (7,850) (9,615)
Repairs and maintenance on leased land/buildings ÏÏÏÏ (2,271) (4,289) (8,538)
Nondeductible expenses of KSO Units ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,590 (1,847) (5,177)
Tax penalty ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (15,645) (5,011)
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (10,485) (53,174) (8,441)
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 171,545 111,488 132,899
Tax expense of the Company ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (255,782) (771,713) (898,279)
Tax expense of the SubsidiaryÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (5,334) (7,925)
Total Tax Expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (255,782) (777,047) (906,204)
27. BASIC EARNINGS PER SHARE

Net income per share is computed by dividing net income with the average number of shares
outstanding during the year, totaling 9,333,333,000, 9,644,472,563 and 10,079,999,640 shares in 1998,
1999 and 2000, respectively.
The Company does not have dilutive potential ordinary shares.
28. CASH DIVIDENDS AND GENERAL RESERVE

‚ Based on the Annual General Meeting of Stockholders as stated in notarial deed No. 25 dated
April 17, 1998 of Notary A. Partomuan Pohan, S.H., LL.M., the stockholders approved to
distribute cash dividends for 1997 amounting to Rp 452,445 million or Rp 48.48 per share, and
appropriate Rp 11,311 million for general reserve.
distribute cash dividends for 1998 amounting to Rp 475,863 million or Rp 50.99 per share, and
appropriate Rp 11,897 million for general reserve.
F-50
distribute cash dividends for 1999 amounting to Rp 1,086,161 million or Rp 107.76 per share,
and appropriate Rp 21,723 million for general reserve.
29. PENSION PLAN
The Company provides a deÑned beneÑt pension plan to its employees under which pension
beneÑts to be paid are based on the employee's latest basic salary and number of years of service. The
plan is managed by Dana Pensiun Telkom, which deed of establishment was approved by the Minister
of Finance of the Republic of Indonesia in his decision letter No. S.199/MK.11/1984 dated April 23,
1984.
The Pension Fund's main sources of funds are the contributions from the employees and the
Company. The employees' contribution is 8.4% of basic salary. Any remaining amount required to fund
the plan is contributed by the Company.
To increase the pension beneÑts, the Company has increased the basic salaries of active employees
by 50%, starting from August 1, 2000.
EÅective January 1, 1999, the Company increased the pension beneÑts of pensioners by 15%, and
the basic salary of active employees which is the basis for the computation of pension beneÑts, in
accordance with the resolutions at the Annual General Meeting of Stockholders and at the Board of
Commissioners' Meeting held in 1999.
The Company's contributions to the pension fund amounted to Rp 44,709 million,

Rp 16,007 million and Rp 228,482 million for the years ended December 31, 1998, 1999 and 2000,
respectively.
The composition of the net periodic pension cost charged to income for the Company's plan
(excluding those of KSO Units) is as follows:
1998 1999 2000
Rp Rp Rp
Return on plan assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (141,206) (223,671) (279,302)
Interest cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 144,821 181,504 216,869
Amortization and deferral ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,287 76,427 90,068
Increase in amortization of prior service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,630 10,802 23,806
Service cost (beneÑts earned during the year)ÏÏÏÏÏÏÏÏÏÏÏÏÏ 12,222 16,007 21,202
Net periodic pension cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30,754 61,069 72,643
The pension cost attributable to the KSO Units amounted to Rp 12,291 million, Rp 15,786 million
and Rp 18,241 million in 1998, 1999 and 2000, respectively.
F-51
The funded status of the plan as of December 31, 1998, 1999 and 2000 is as follows:
1998 1999 2000
Rp Rp Rp
Vested beneÑts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,057,611 1,252,802 1,594,178
Accumulated beneÑt obligationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,188,450 1,386,172 1,790,885
Projected beneÑt obligation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,452,888) (1,634,356) (2,209,592)
Plan assets at fair value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,518,948 1,819,798 2,091,721
Projected beneÑt obligation (in excess of ) less than
plan assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 66,060 185,442 (117,871)
Unamortized net amount resulting from changes in
plan experience and actuarial assumptionsÏÏÏÏÏÏÏÏÏÏ (572,130) (733,110) (363,314)
Unamortized prior service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 141,677 166,847 284,838
Unrecognized net obligation at the date of initial
application of PSAK No. 24 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 292,061 263,427 234,792
Prepaid (accrued) pension cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (72,332) (117,394) 38,445
Plan assets consist mainly of Rupiah time deposits.

The unrecognized net obligation at the date of initial application of PSAK No. 24 is amortized over
the remaining average future working lives of active employees, i.e., 17.2 years, starting from January 1,
1992.
The actuarial valuations for the pension plan as of December 31, 1998, 1999 and 2000 were
prepared by PT Watson Wyatt Purbajaga, an independent actuary in association with Watson Wyatt
Worldwide, using the ""projected-unit-credit'' method with the following assumptions:
1998 1999 2000
% % %
Discount rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12.5 13 13
Expected long-term rate of return on Pension Fund assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13 15 13
Salary growth rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6 6 6
DeÑned beneÑts growth rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 15 Ì
30. POSTRETIREMENT BENEFITS

The Company provides a postretirement health care plan for all of its pensioners who have
worked for over 20 years and to their eligible dependents. The requirement of working for over 20 years
does not apply to the employees who retired prior to June 3, 1995. However, the employees hired by
the Company starting from November 1, 1995 will no longer be entitled to this plan. The plan is
managed by Yayasan Kesehatan Pegawai Telkom (""YKPT'').
The Company accounts for the cost of the beneÑts over the working lives of its employees based
on actuarial computations similar to those provided by Statement of Financial Accounting Standards
No. 106, ""Employers' Accounting for Postretirement BeneÑts Other than Pensions'' (""SFAS 106''), of
U.S. GAAP. The transition obligation at the date of initial application of SFAS 106 is Rp 524,250 million
and is being amortized over 20 years starting January 1, 1995.
F-52
The Company's contributions to YKPT amounted to Rp 111,498 million, Rp 150,216 million and
The composition of the net periodic postretirement beneÑt cost (excluding those of KSO Units) is
as follows:
1998 1999 2000
Rp Rp Rp
Return on plan assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (15,481) (39,773)
Service costÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,452 11,519 16,082
Interest cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 78,254 104,212 149,765
Amortization of unrecognized transition obligationÏÏÏÏÏÏÏÏÏÏÏÏ 26,213 26,213 26,213
Amortization of prior service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4,922) (4,922) 12,816
Net periodic postretirement beneÑt costÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 107,997 121,541 165,103
Cost of postretirement beneÑts attributable to the KSO Units amounted to Rp 9,055 million,
Rp 12,126 million and Rp 16,704 million in 1998, 1999 and 2000, respectively.
The actuarial valuations for the postretirement beneÑt plan as of December 31, 1998, 1999 and 2000
were prepared by PT Watson Wyatt Purbajaga, an independent actuary in association with Watson
Wyatt Worldwide, using the ""projected-unit-credit'' method with the following assumptions:
1998 1999 2000
% % %
Discount rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12.5 12.5 13
Expected long-term rate of return of YKPT assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 12.5 13
Cost trend rateÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10-15 10-15 10
The funded status of the plan as of December 31, 1998, 1999 and 2000 is as follows:
1998 1999 2000
Rp Rp Rp
Accumulated postretirement beneÑt obligation
Retirees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 458,130 628,294 713,646
Other fully eligible plan participants ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39,884 73,466 116,807
Other active plan participants ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 348,532 510,441 551,411
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 846,546 1,212,201 1,381,864
Plan assets at fair value ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (126,189) (257,761) (317,694)
Unfunded postretirement beneÑt obligation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 720,357 954,440 1,064,170
Unrecognized prior service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 58,025 53,103 48,180
Unrecognized transition obligation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (419,398) (393,185) (366,972)
Unrecognized net loss ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (68,603) (341,708) (373,775)
Accrued postretirement beneÑt cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 290,381 272,650 371,603
F-53
A 1% increase in the cost trend rate would increase service cost and interest cost, and accumulated
postretirement beneÑt obligation as of December 31, 1998, 1999 and 2000 as follows:
1998 1999 2000
Rp Rp Rp
Service cost and interest costÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 116,811 155,685 222,659
Accumulated postretirement beneÑt obligation ÏÏÏÏÏÏÏÏÏÏÏ 1,011,494 1,453,738 1,619,262
31. TRANSACTIONS WITH RELATED PARTIES

In the normal course of business, the Company entered into transactions with related parties. The
following transactions with related parties have been conducted under terms and conditions which are
the same if these were conducted with third parties:
a. Government of the Republic of Indonesia

‚ The Company obtained ""two-step loans'' from the Government of the Republic of Indonesia,
the Company's majority shareholder (Note 15).
‚ The Company pays concession fees for telecommunications services provided and radio
frequency usage charges to the Ministry of Communications (formerly, Ministry of Tourism,
Post and Telecommunications) of the Republic of Indonesia. Concession fees amounted to
Rp 42,971 million, Rp 52,028 million and Rp 50,467 million in 1998, 1999 and 2000, respectively,
while radio frequency usage charges amounted to Rp 7,257 million, Rp 7,006 million and
b. Indonesian Satellite Corporation Tbk (""Indosat'')

The Company has an agreement with Indosat, a majority state-owned international telecommuni-
cations services company, for the provision of international telecommunications services to the public.
The principal matters covered by the agreement are as follows:
‚ The Company provides local network for the customers to make or receive international calls.
Indosat provides the international network for the customers, except for certain border towns,
as determined by the Director General of Post and Telecommunications of the Republic of
Indonesia. The international telecommunications services include telephone, telex, telegram,
packet switched data network, television, teleprinter, Alternate Voice/Data Telecommunica-
tions (AVD), hotline and teleconferencing.
‚ The Company and Indosat are responsible for their respective telecommunications facilities.
‚ Customer billing and collection, except for leased lines and public phones located at the
international gateways, are handled by the Company.
‚ The Company receives compensation for the services provided in the Ñrst item above, based on
the interconnection tariÅ determined by the Minister of Tourism, Post and Telecommunications
of the Republic of Indonesia (Note 35).
The Company's compensation relating to leased lines/channel services, such as IBS, AVD and
printer is calculated at 15% of Indosat's revenues from such services.
F-54
Indosat also leases circuits from the Company to link Jakarta and Medan.
The Company has been handling customer billing and collection for Indosat. Indosat is gradually
taking over the activities and performing its own direct billing and collection. The Company receives
compensation from Indosat computed at 1% of the collections made by the Company starting
January 1, 1995, plus the billing process expenses which are Ñxed at a certain amount per record.
Interconnection revenues earned from Indosat were Rp 169,262 million, Rp 259,136 million and
c. Satelindo
The Company has an agreement with Satelindo, an associated company (Note 9), whereby both
parties agreed, among other matters, on the following:
‚ Interconnection of the Company's PSTN with Satelindo's international gateway exchange,
enabling the Company's customers to make outgoing or receive incoming international calls
through Satelindo's international gateway exchange.
‚ Billings for the international telecommunications services used by domestic customers through
Satelindo's international gateway exchange will be handled by the Company.
The Company also has an agreement with Satelindo for the interconnection of Satelindo's GSM
mobile cellular telecommunications network with the Company's PSTN, enabling the Company's
customers to make outgoing calls to or receive incoming calls from Satelindo's customers.
Interconnection revenues earned from Satelindo were Rp 114,644 million, Rp 213,803 million, and
The Company leases international circuits from Satelindo. Payment made in relation to the lease
expense amounted to Rp 19,611 million in 2000.
Based on an agreement entered into among the Company, PT Bimagraha Telekomindo and
Indosat in 1993, at the time of Satelindo's establishment, the Company agreed to transfer to Satelindo,
its so-called B2P, B2R and B4 Palapa satellites and other assets relating to the Company's satellite
control station located in Jakarta. These transfers are to be covered in a separate agreement between
Satelindo and the Company. The separate agreement regarding the transfers of these satellites and
other assets has not been made. In November 2000, the Company entered into an agreement with a
third party, in which the Company agreed to sell the B2R Satellite, or to lease the said satellite to such
third party if the sale is not consummated. In the Extraordinary Meeting of Satelindo's Stockholders on
November 29, 2000, a representative was appointed by Satelindo's Stockholders to discuss the satellite
issue with the Company.
In 1994, the Company transferred to Satelindo the right to use a parcel of Company-owned land
located in Jakarta which had been previously leased to Telekomindo, an associated company (Note 9).
Based on the transfer agreement, Satelindo is given the right to use the land for 30 years and can apply
for the right to build properties thereon. The ownership of the land is retained by the Company.
Satelindo agreed to pay Rp 43,023 million to the Company for the thirty-year right. Satelindo paid
Rp 17,214 million in 1995 and the remaining Rp 25,809 million has not been paid since then, as the
Utilization Right (""Hak Pengelolaan Lahan'') on the land could not be delivered as provided in the
F-55
transfer agreement. In 2000, the Company and Satelindo agreed on an alternative solution which will
beneÑt both parties, by accounting the above payment as lease consideration.
d. The Company provides telecommunication services to Government agencies.
e. The Company has entered into agreements with Government agencies and associated companies
(Note 9) Ì Lintasarta, CSM and Patrakomindo for utilization of the Company's Palapa B4 and
Telkom 1 satellite transponders or frequency channels. Revenues earned from these transactions
amounted to Rp 86,305 million in 2000.
f. The Company provides leased lines to associated companies (Note 9) Ì Telkomsel, CSM,
Lintasarta, Satelindo, Komselindo, Excelcomindo Pratama, Mobisel, Metrosel and PSN which can
be used by the associated companies permanently or temporarily for telephone, telegraph, data,
telex, facsimile or other telecommunications services. Revenue earned from these transactions
amounted to Rp 81,983 million in 2000.
g. The Company provides a data communication network system for Lintasarta, and operates
telemetry tracking and command station for PSN, both of which are associated companies
(Note 9). Revenues earned by the Company from these transactions amounted to
Rp 5,699 million, Rp 11,978 million and Rp 16,384 million in 1998, 1999 and 2000, respectively.
h. The Company purchases property and equipment including construction and installation services
from a number of related parties. These related parties include PT Industri Telekomunikasi
Indonesia, Lembaga Elektronika Nasional, PT Adhi Karya, PT Pembangunan Perumahan, PT
Nindya Karya, PT Boma Bisma Indra, PT Wijaya Karya, PT Waskita Karya which all are state-
owned companies, PT Gratika which is an associated company of Dana Pensiun Telkom,
Telekomindo and PT Bangtelindo which are associated companies (Note 9), and Koperasi
Pegawai Telekomunikasi, a related party cooperative. Purchases made from these related parties
amounted to Rp 213,892 million, Rp 84,320 million and Rp 104,669 million in 1998, 1999 and 2000,
respectively.
i. The Company carries insurance (on its property, plant and equipment against property losses and
on employees' social security) obtained from PT Asuransi Jasa Indonesia, PT Asuransi Tenaga
Kerja and PT Persero Asuransi Jiwasraya, which are state-owned insurance companies. Insurance
premiums amounted to approximately Rp 41,227 million, Rp 44,448 million and Rp 100,716 million
in 1998, 1999 and 2000, respectively.
j. The Company maintains current accounts and time deposits (Notes 4 and 5) in several state-
owned banks. In addition, some of those banks are appointed as collecting agents for the
Company. The Company also has an investment in mutual funds managed by Danareksa, a state-
owned company (Note 5).
k. The Company has revenue-sharing arrangements with Telekomindo, an associated company
(Note 9). Revenues earned under these arrangements amounted to Rp 36,428 million,
Rp 29,096 million and Rp 93,348 million in 1998, 1999 and 2000, respectively.
l. The Company leases buildings, purchases materials and construction services, and utilizes
maintenance and cleaning services from Dana Pensiun Telkom and PT Sandhy Putra Makmur, a
subsidiary of Yayasan Sandikara Putra Telkom Ì a foundation managed by Dharma Wanita
F-56
Telkom. Total charges from these transactions amounted to Rp 2,755 million, Rp 12,780 million
and Rp 35,103 million in 1998, 1999 and 2000, respectively.
m. The Company purchased encoded phone cards from Perusahaan Umum Percetakan Uang
Republik Indonesia, a state-owned company. Expenses arising from this transaction amounted to
Rp 634 million, Rp 292 million, and Rp 2,195 million in 1998, 1999 and 2000, respectively.
n. In 1991, the Company granted loans to Koperasi Telekomunikasi (""Koptel'') amounting to

Rp 1,000 million, repayable by 2001, to support Koptel's activities in providing housing loans to
the Company's employees. The balance of the loans amounted to Rp 300 million as of
December 31, 1998, 1999 and 2000.
o. The Company earned interconnection revenues from Telkomsel, Komselindo, Excelcomindo

Pratama, Metrosel, Mobisel, Ratelindo, BBT and Patrakomindo, which are associated companies
(Note 9) , totaling Rp 265,906 million, Rp 407,133 million and Rp 630,730 million in 1998, 1999 and
2000, respectively.
p. In addition to revenues earned under the KSO Agreement (Notes 19 and 33), the Company also
earned income from buildings rental, repairs and maintenance services and training services,
provided to the KSO Units, amounting to Rp 96,393 million, Rp 28,114 million and Rp 95,227
million in 1998, 1999 and 2000, respectively.
q. The Company provides a deÑned beneÑt pension plan and a postretirement health care plan for
its pensioners through Dana Pensiun Telkom and YKPT, respectively (Notes 29 and 30).
The Company has also seconded a number of its employees to related parties to assist them in
operating their business. In addition, the Company provided certain of its related parties with the right
to use its buildings free of charge.
Presented below are balances of accounts with related parties:
a. Cash and cash equivalents (Note 4)
b. Temporary investments (Note 5)
c. Trade accounts receivable (Note 6)

1999 2000
Rp Rp
d. Other accounts receivable

Government agenciesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 31,251
State-owned banks (interest)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,394 28,591
KSO Units ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,048 5,822
Employees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 635 517
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34,662 1,851
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 53,739 68,032
F-57
1999 2000
Rp Rp
e. Advances and others
PT Industri Telekomunikasi IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 127
Others ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 328 Ì
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 328 127
f. Trade accounts payable

PT Satelit Palapa Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 45,770 77,987
PT Industri Telekomunikasi IndonesiaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,933 46,092
PT Indonesian Satellite CorporationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 45,667 41,235
PT Excelcomindo Pratama ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34,663 38,849
Government agenciesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27,968 33,913
KSO Units ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 148,069 21,578
PT Waskita Karya ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 267 18,238
PT Telekomindo Primabhakti ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,652 18,113
PT Telekomunikasi Selular ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 10,358
Koperasi Pegawai TelkomÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,961 4,390
Lembaga Elektronika Nasional ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 523 486
PT Boma Bisma Indra ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,842 354
PT Bangtelindo ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 886 63
PT Sandhy Putra Makmur ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 593 51
g. Other accounts payable (to employees) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19,039 12,678
h. Accrued expense
Yayasan Kesehatan Pegawai Telkom ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 272,650 371,603
Government agenciesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 421,499 269,933
Employees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 103,551 72,652
PT Asuransi Jasa Indonesia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,636 5,442
Dana Pensiun Telkom ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 110,961 Ì
i. Advances from customers and Government agenciesÏÏÏÏÏÏÏÏ 7,455 33,305
j. Long-term debt (Note 15).
32. SEGMENT INFORMATION
The Company and its subsidiary are presently engaged in providing local and domestic long-
distance telephone services and other services (including among others mobile cellular telecommunica-
F-58
tions, leased lines, telex, transponder, satellite, and Very Small Aperture Terminal Ì VSAT) as well as
providing ancillary services.
Telephone services and other telecommunications services are provided by the regional divisions
and the network division which operate all over Indonesia.
Management presents segment information based on geographical location of the customers.
a. Revenues
1999 2000
% Rp % Rp
Telecommunications services
KSO I Chairman's OÇce (Sumatera) ÏÏÏÏÏÏÏÏÏÏÏÏ 6.91 538,270 7.44 697,313
Regional Division II (Jakarta) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 49.09 3,824,338 45.62 4,277,403
KSO III Chairman's OÇce (West Java) ÏÏÏÏÏÏÏÏÏÏ 4.51 351,309 4.56 427,228
KSO IV Chairman's OÇce (Central Java) ÏÏÏÏÏÏÏÏ 4.56 355,032 4.95 464,200
Regional Division V (East Java) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20.75 1,616,502 20.28 1,901,384
KSO VI Chairman's OÇce (Kalimantan) ÏÏÏÏÏÏÏÏÏ 2.16 168,550 2.57 240,819
KSO VII Chairman's OÇce (East Indonesia)ÏÏÏÏÏÏ 3.39 263,762 4.63 433,839
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8.48 660,537 9.05 848,763
Ancillary services(*) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.15 11,909 0.90 84,757
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100.00 7,790,209 100.00 9,375,706
(*) Including those of Head OÇce which has signiÑcant cash and cash equivalents, and short-term as well as long-term
investments which are not allocated to each segment.
b. Segment Result
1999 2000
% Rp % Rp
KSO I Chairman's OÇce (Sumatera) ÏÏÏÏÏÏÏÏÏÏ 12.11 356,567 13.00 524,916
Regional Division II (Jakarta) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 74.34 2,187,984 60.04 2,424,154
KSO III Chairman's OÇce (West Java) ÏÏÏÏÏÏÏÏ 7.91 232,920 7.50 302,896
KSO IV Chairman's OÇce (Central Java) ÏÏÏÏÏÏ 8.86 260,766 9.61 388,072
Regional Division V (East Java) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27.17 799,707 22.73 917,744
KSO VI Chairman's OÇce (Kalimantan) ÏÏÏÏÏÏÏ 3.57 105,124 4.49 181,207
KSO VII Chairman's OÇce (East Indonesia)ÏÏÏÏ 4.16 122,457 7.40 298,801
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1.31) (38,557) 6.04 243,646
Ancillary services(*) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (36.81) (1,083,505) (30.81) (1,244,113)
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100.00 2,943,463 100.00 4,037,323
Other income (charges) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 32,698 (565,248)
Total before eliminations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,976,161 3,472,075
EliminationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (13,448) (13,699)
Income Before Tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,962,713 3,458,376
F-59
c. Total Assets
1999 2000
% Rp % Rp
KSO I Chairman's OÇce (Sumatera) ÏÏÏÏÏÏÏÏÏÏ 4.74 1,250,094 3.96 1,146,500
Regional Division II (Jakarta) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 24.31 6,408,478 21.34 6,169,731
KSO III Chairman's OÇce (West Java) ÏÏÏÏÏÏÏÏ 2.39 631,162 2.56 739,283
KSO IV Chairman's OÇce (Central Java) ÏÏÏÏÏÏ 1.83 482,322 1.53 443,852
Regional Division V (East Java) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11.71 3,085,385 11.19 3,237,095
KSO VI Chairman's OÇce (Kalimantan) ÏÏÏÏÏÏÏ 1.60 422,358 1.34 386,826
KSO VII Chairman's OÇce (East Indonesia)ÏÏÏÏ 3.44 905,590 2.82 815,219
OthersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8.50 2,241,348 12.13 3,506,693
Ancillary services(*) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 41.48 10,934,150 43.13 12,473,089
Total before elimination ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100.00 26,360,887 100.00 28,918,288
Elimination ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (31,233) (38,067)
Total after eliminationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26,329,654 28,880,221
(*) Including those of Head OÇce which has signiÑcant cash and cash equivalents, and short-term as well as long-term
investments which are not allocated to each segment.
33. JOINT OPERATION SCHEME (""KSO'')
In 1995, the Company and Ñve investors (PT Pramindo Ikat Nusantara, PT AriaWest International,
PT Mitra Global Telekomunikasi Indonesia, PT Dayamitra Telekomunikasi, and PT Bukaka Singtel
International) entered into agreements on Joint Operation Scheme (""KSO'') and KSO construction
agreements for the provision of telecommunications facilities and services for the Sixth Five-Year
Development Plan (""Repelita VI'') of the Republic of Indonesia. The Ñve investors have conducted the
development and have taken over the operation of the basic Ñxed telecommunications facilities and
services in Ñve of the Company's seven regional divisions.
The agreements contain, among others, the following provisions:
‚ The Company's existing assets in the Ñve regional divisions, together with the assets to be built
under the KSO construction agreements, will be managed, operated and maintained by each
KSO Unit, in the name of the Company and for and on behalf of the Company and the KSO
Investors, commencing from January 1, 1996 to December 31, 2010 (""KSO period'').
‚ In the aggregate, a minimum of two million lines are to be planned, designed, engineered,
Ñnanced and constructed by the KSO Investors during a 3-year period beginning from
January 1, 1996, except for Regional Division VI Ì Kalimantan which started on April 1, 1996.
‚ The Company will receive two principal types of payments from each KSO Unit during the
term of the KSO, namely Minimum Telkom Revenues (""MTR'') and share in distributable KSO
revenues, and a one-time initial investor payment from each of the KSO Investors.
F-60
The initial investor payments totaling U.S.$105 million or equivalent to Rp 230,239 million were
made by the KSO Investors to the Company as compensation for their rights to participate in
developing and operating telecommunications facilities in the KSO regional divisions.
MTR represents an annual amount guaranteed by the KSO Investors and is required to be
supported by bank guarantees. The MTR is payable on a monthly basis in Ñxed amounts which may
increase every year during the KSO period. A further monthly adjustment for the MTR is possible
depending upon KSO Investor's performance under its commitment to install additional lines.
Distributable KSO revenues are the entire KSO revenues, net of MTR and operational expenses of
the KSO Units, as provided in the KSO agreements. These revenues are shared between the Company
and the KSO Investors based on percentages agreed upon. The Company receives 35% of the
distributable KSO revenues from Regional Division VII, and 30% from the other KSO Regional
Divisions.
At the end of the KSO period, all rights, title and interests of the KSO Investor in existing
installations and all work in progress, inventories, equipment, materials, plans and data relating to any
approved additional new installation projects then uncompleted or in respect of which Interconnection
Tests have not then been successfully completed, shall be sold and transferred to the Company without
requiring any further action by any party, upon payment by the Company to the KSO Investor of one
hundred Rupiah, plus:
a. the net present value, if any, of the KSO Investor's projected share in distributable KSO
revenues, from the additional new installations forming part of the KSO system on the termination
date, over the balance of the applicable payback periods.
b. an amount to be agreed upon between the Company and the KSO Investor as fair
compensation in respect of any uncompleted or untested additional new installations transferred
as referred to above.
The depreciation of the Rupiah against the U.S. Dollar (Note 39), which started in the second
semester of 1997, has impacted the Ñnancial condition of the KSO Investors. In response to the
economic condition, the KSO Investors and the Company have signed a Memorandum of Understand-
ing (MOU) to amend certain provisions of the KSO agreements (Note 36c). For the years 1998 and
1999, the Company had adopted the provisions of the MOU. Starting November 1999, the Company
and the KSO Investors have begun to renegotiate the terms of the KSO agreements in conjunction with
the changing environment and the expiration of certain terms in the MOU. Among others, it was
agreed to return to most of the provisions of the original KSO agreements starting January 1, 2000.
Discussions between the Company and the KSO Investors concerning the KSO problems have
arrived at various alternatives. The Company views that the continuation of the original KSO
agreements, with some amendments, is the most suitable to the Company and has the minimum
impact on the Company's Ñnancial position and result of operations. Termination of the KSO
agreements could have signiÑcant impact as the Company would require signiÑcant funding to buy the
KSO assets. Pending completion of the negotiations, the long-term solution of the KSO problems and
its eÅect on the Company's Ñnancial condition and operational activities cannot be determined.
F-61
34. REVENUE-SHARING AGREEMENTS WITH SEVERAL INVESTORS

The Company has entered into separate agreements with several investors under Revenue-Sharing
Arrangements (""RSA'') to develop Ñxed lines, analog mobile cellular lines, public card-phone booths
(including their maintenance), and related supporting facilities.
Under the RSA, the investors Ñnance the costs incurred in developing telecommunications
facilities. Upon completion of the construction, the Company manages and operates the facilities. The
investors legally retain the rights to the property, plant and equipment constructed by them during the
revenue-sharing periods. At the end of each revenue-sharing period, the investors transfer the
ownership of the facilities to the Company.
The Company bears the cost of repairs and maintenance of the facilities during the revenue-
sharing period. The revenue-sharing period is determined on the basis of the internal rates of return
agreed by both parties. The internal rates of return range from 24% to 30%, and the revenue-sharing
periods vary from one year and seven months to Ñfteen years from the start of commercial operations.
The revenue-sharing period can be either Ñxed regardless of full investment returns to the investors, or
extended to ensure full investment returns to the investors. The revenue-sharing periods end on
various dates until 2009.
The revenues earned from the customers in the form of line installation charges are fully for the
account of the investors. The revenues from outgoing telephone pulse and monthly subscription
charges are shared between the investors and the Company at the proportion of 60:40 or 70:30 (in favor
of the investors) depending on the agreements. Certain additional arrangements are made for revenues
earned from analog mobile cellular, whereby revenues from international outgoing pulses are fully
owned by the Company. Revenues earned from pay phone cards during the revenue-sharing period
are shared at the proportion of 60:40 (in favor of the investors) based on the recorded usage of pulses.
The investors' share of revenues amounted to Rp 527,504 million, Rp 527,708 million and
The Company has no plans to enter into any additional revenue-sharing arrangements for Ñxed
line telephone services.
35. INTERCONNECTION TARIFFS AND TARIFF ARRANGEMENTS

TariÅs for telecommunications services are based on decrees issued by the Ministry of Communi-
cations, formerly, Ministry of Tourism, Post and Telecommunications (""MTPT'').
Fixed Line Subscribers' TariÅs

TariÅs for Ñxed line subscribers are imposed for network access and usage. Access charges consist
of a one-time installation charge and a monthly subscription charge. Usage charges are measured in
pulses and classiÑed as either local or domestic long-distance. The tariÅs depend on call distance, call
duration, the time of day, the day of the week and holidays.
The telephone tariÅs are regulated under decree No. KM.9/1999 dated January 29, 1999 and letter
No. 47/SM/III/Phb-99 dated March 1, 1999 of the Ministry of Communications, which came into eÅect
on February 1, 1999.
F-62
Interconnection TariÅs
Interconnection tariÅs regulate the sharing of long-distance interconnection calls between the
Company and other cellular operators.
The current interconnection tariÅ is governed under MTPT Decree No. KM.46/PR.301/MPPT-98
(""Decree No. 46'') dated February 27, 1998 which came into eÅect on April 1, 1998.
This decree has superseded decree No. KM.108/PR.301/MPPT-94 and the amendment thereto,
No. KM.5/PR.301/MPPT-97, which had been in operation since December 28, 1994 and January 1,
1997, respectively.
Interconnection tariÅs based on Decree No. 46 are as follows:
a. International interconnection with Public Switched Telephone Network (""PSTN'')
The international interconnection tariÅ is calculated by applying the following charges to
successful incoming and outgoing calls to the Company's network:
TariÅ
Access charge ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 500 per call

Usage chargeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 330 per paid minutes
Universal Service Obligation (USO) ÏÏÏÏÏÏÏÏÏÏ Rp 750 per call
On June 11, 1999, based on Decree No. KM.37/1999 of the Ministry of Communications, eÅective
December 1, 1998 the above international interconnection tariÅs were revised as follows:
TariÅ
Access charge ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 850 per call

Usage chargeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 550 per paid minutes
Universal Service Obligation (USO) ÏÏÏÏÏÏÏÏÏÏ Rp 750 per call
Indosat is exempted from paying the USO until December 31, 2004, while the USO
charges payable by Satelindo are paid directly to the MTPT/Ministry of Communications.
b. Mobile cellular interconnection with the PSTN
1. Local Calls
For local calls from a mobile cellular network to PSTN, the cellular operator pays the
Company 50% of the prevailing tariÅ for local calls. For local calls from PSTN to a cellular
network, the Company charges its subscribers the applicable local call tariÅ plus an air
time charge, and pays the cellular operator the air time charge.
2. Domestic Long-distance Calls
Decree No. 46 provides tariÅs which vary among long-distance carriers, and indicates
that it is possible for long-distance calls to be carried by more than one long-distance
network. Pursuant to this decree, for long-distance calls which originate from the PSTN,
the Company is entitled to retain a portion of the prevailing long-distance tariÅ, which
portion ranges from 40% of the tariÅ, in cases where the entire long-distance portion is
carried by one cellular operator and delivered to another, and up to 85%, in cases where
the entire long-distance portion is carried by the PSTN.
F-63
For long-distance calls which originate from a cellular operator, the Company is
entitled to retain a portion of the prevailing long-distance tariÅ, which portion ranges
from 25% of the tariÅ, in cases where the entire long-distance portion is carried by a
cellular operator and the call is delivered to a cellular subscriber, and up to 85%, in cases
where the entire long-distance portion is carried by the PSTN and the call is delivered to
a PSTN subscriber.
Interconnection tariÅs with mobile cellular networks, including USO, are determined based on the
duration of the call. Access and usage charges for international telecommunications traÇc interconnec-
tion with telecommunications networks of more than one domestic carrier are to be shared proportion-
ately with each carrier involved, which proportion is determined by the MTPT.
Interconnection tariÅs between a Ñxed cellular network and the PSTN is regulated under MTPT
letter No. KU.506/1/1/MPPT-97 dated January 2, 1997 and letter No. KU.506/4/6/MPPT-97 dated
July 21, 1997. Currently, Ratelindo and the Company are the only operators of Ñxed cellular networks.
For Ñxed cellular interconnection with the PSTN, the ""sender-keeps-all'' basis for local calls is applied
and for domestic long-distance calls which originate from Ratelindo's network and transit to PSTN, the
Company receives 35% of Ratelindo's revenue for such calls. For domestic long-distance calls that
originate from PSTN, the Company retains 65% as its revenue for such calls.
The Directorate General of Post and Telecommunications is currently preparing new interconnec-
tion tariÅs in connection with the issuance of Law No. 36 year 1999 and Government Regula-
tion No. 52 year 2000.
36. COMMITMENTS
a. Letters of Comfort
The Company issued support in the form of letters of comfort to certain lenders of Komselindo
with respect to a U.S.$100 million loan in 1997 and to lenders of Mobisel, with respect to a
U.S.$60 million loan in 1996, which are due in 2002 and 2001, respectively. Komselindo and Mobisel are
both associated companies. The letters of comfort provide that the Company agrees to use its best
eÅorts to cause these associated companies to perform all their obligations under the loan agreements.
b. Capital Expenditures
As of December 31, 2000, the amounts of capital expenditures committed under contractual
arrangements, principally relating to procurement and installation of switching equipment, transmis-
sion equipment and cable network, are as follows:
Amounts in
Foreign Currencies Equivalent
Currencies (in thousands) in Rupiah
Rupiah ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 684,416

United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50,822 491,701
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,094,530 92,276
French FrancÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,140 7,064
Swedish KronaÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 431 439
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,275,896
F-64
c. Memorandum of Understanding
On June 5, 1998, the Company and all of the KSO Investors entered into a Memorandum of
Understanding (""MOU'') agreeing to amend certain provisions of the KSO agreements, including
among others:
‚ The percentage of sharing of the distributable KSO revenues for 1998 and 1999 shall become
10% and 90% for the Company and the KSO Investors, respectively.
‚ The minimum number of access line units to be installed by the KSO Investors up to March 31,
1999 shall be 1,268,000 lines.
‚ The incremental rate of the MTR will not exceed 1% in 1998 and 1.5% in 1999 for the KSO
agreements with the Investors that have MTR incremental factors.
‚ ""Operating Capital Expenditures'' in each of the KSO Units will be shared between the
Company and the respective KSO Investors in proportion to the previous year's share in the
annual net income of the respective KSO Units, starting from 1999.
‚ The cancellation of the requirement to maintain a bank guarantee in respect of MTR.
In 1998 and 1999, the Company adopted the above provisions of the MOU. Starting Novem-
ber 1999, the Company and the KSO Investors have begun to renegotiate the terms of the KSO
agreements in conjunction with the changing environment and the expiration of certain terms in the
MOU. Commencing January 1, 2000, the Company has recorded the MTR and distributable KSO
Revenues based on the terms originally agreed under the KSO agreements.
d. Agreement with PT AriaWest International (""AriaWest'')

In 1997, the Company appointed AriaWest (investor of KSO III) to conduct a feasibility study on
the business of providing multimedia services for a cost of Rp 14,000 million. If the business were
determined to be feasible, the Company and AriaWest agreed to establish a joint venture in conducting
the business and such payment would be considered as the Company's capital contribution in the joint
venture. However, due to the deteriorating economic conditions which began since the middle of 1997,
the joint venture company was not feasible to be established. The Company has recognized the
Rp 14,000 million as an expense in 1998. The amount was fully settled in 2000.
37. CONTINGENCIES
a. Claims from AriaWest
AriaWest, an investor in a Joint Operation Scheme, has recently asserted against the Company
several claims under Indonesian law. These putative claims assert (i) AriaWest's entitlements, pursuant
to the Good Faith Interim Solutions Agreement dated September 12, 2000, to withhold certain
Minimum Telkom Revenue (""MTR'') due to the Company under the KSO Agreement; (ii) AriaWest
entitlements, pursuant to the KSO Agreement, to set-oÅs against MTR due to the Company under the
KSO Agreement; and (iii) breach of the KSO Agreement by the Company. AriaWest has not asserted
these claims in any legal proceeding; instead, it has asserted them only through written correspondence
addressed to the Company and the Government of Indonesia, as well as verbally during the course of
F-65
discussions between the parties. In its correspondence, AriaWest expressly has purported to reserve its
rights to alter or modify at any time its allegations or putative claims against the Company.
Given the preliminary nature of AriaWest's putative claims, it is impossible to predict at this time
whether any legal proceeding will ensue as a result of such claims.
b. Litigation
Except for claims from AriaWest, the Company is not currently a party to and, in recent years, has
not been a party to, any material legal or arbitration proceedings or disputes pending or threatened
against the Company or with respect to its properties which are material, or which have had or which
may have, a signiÑcant eÅect on the Company's Ñnancial position.
38. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The balances of monetary assets and liabilities denominated in foreign currencies are as follows:
1999 2000
Foreign Foreign
Currencies Equivalent Currencies Equivalent
(in thousands) in Rupiah (in thousands) in Rupiah
Assets
Cash and cash equivalents
Related parties
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ 47,843 338,251 44,470 425,815
French Franc ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 2 4,631 6,298
Swedish Krona ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 289 291
Great Britain Pound sterlingÏÏÏÏÏ 6 74 3 40
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11 1 172 14
Deutsche Mark ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 0.47 2
Singapore Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 33 142 Ì Ì
Third parties
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ 512 3,617 1,614 15,464
Temporary investments
Third parties
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 300 2,879
Trade accounts receivable
Related parties
Third parties
Singapore Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 1 6
Malaysian Ringgit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 2 5
Other accounts receivable
Related parties
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ 728 5,150 1,481 14,181
Third parties
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ 236 1,666 4 38
F-66
1999 2000
Foreign Foreign
Advances and others

United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ 7,079 31,037 Ì Ì
French Franc ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,578 5,641 Ì Ì
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 210,627 4,875 Ì Ì
Australian DollarÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 510 1,004 Ì Ì
Total Assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 431,344 594,113
Liabilities
Trade accounts payable
Third parties
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ 925 6,614 702 6,790
French Franc ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,964 4,350 18,971 26,070
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 1,264,150 106,576
Deutsche Mark ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 230 1,058
Accrued expenses
Swedish Krona ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 21 22
Great Britain Pound sterlingÏÏÏÏÏ Ì Ì 61 881
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 38,462 2,685 82,389 6,946
Deutsche Mark ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 2 7
Singapore Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 118 658
Australian DollarÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 29 155
Netherlands GuilderÏÏÏÏÏÏÏÏÏÏÏÏ 955 3,119 507 2,075
Advances from customers and
suppliers Ì third parties
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ 1,555 11,116 938 9,076
Current maturities of long-term
debt Ì related party
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 31,567 305,412
French Franc ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 18,824 25,868
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 371,483 31,318
Netherlands GuilderÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 3,044 12,455
Long-term debt
Related parties
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏ 375,715 2,686,365 361,639 3,498,858
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12,912,553 901,521 15,487,259 1,305,675
Netherlands GuilderÏÏÏÏÏÏÏÏÏÏÏÏ 22,831 74,601 16,743 68,505
F-67
1999 2000
Foreign Foreign
Third parties
Swedish Krona ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 297 250 866 883
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,736,463 121,235 1,967,149 165,809
Deutsche Mark ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,879 6,915 40 184
Australian DollarÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,881 13,450 Ì Ì
Netherlands GuilderÏÏÏÏÏÏÏÏÏÏÏÏ 972 3,176 36 149
Total Liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,663,154 6,320,784
Net Liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4,231,810) (5,726,671)
The conversion rates used by the Company on December 31, 1999 and 2000 and the prevailing
rates on February 28, 2001 are as follows (in full Rupiah amount):
December 31,
1999 2000 February 28, 2001
Foreign Currency Buying Selling Buying Selling Buying Selling
United States Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,070.0 7,150.0 9,575.0 9,675.0 9,825.0 9,840.0
French Franc ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,085.0 1,097.4 1,359.8 1,374.2 1,378.4 1,380.7
Great Britain Pound sterling ÏÏÏÏÏÏÏÏÏÏÏ 11,425.1 11,558.0 14,303.1 14,462.2 14,185.3 14,216.8
Japanese Yen ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 69.0 69.8 83.4 84.3 84.3 84.5
Deutsche Mark ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,638.7 3,680.8 4,560.4 4,609.1 4,622.7 4,630.8
Singapore DollarÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,242.4 4,293.0 5,521.9 5,532.8 5,640.1 5,650.3
Australian Dollar ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,609.6 4,669.0 5,306.5 5,371.6 5,166.0 5,183.7
Netherlands Guilder ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,229.5 3,267.5 4,047.6 4,091.6 4,102.8 4,110.8
Swedish Krona ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 830.4 840.8 1,007.0 1,018.6 997.6 999.2
Malaysian Ringgit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,860.4 1,881.7 2,519.7 2,546.1 2,585.5 2,589.5
On the basis of the rates on February 28, 2001, the Company's foreign exchange loss on foreign
currency liabilities, net of foreign currency assets as of December 31, 2000 is increased by
Rp 63,910 million.
39. ECONOMIC CONDITION

Since the middle of 1997, many Asia PaciÑc countries including Indonesia have been experiencing
adverse economic condition mainly resulting from currency depreciation in the region, the principal
consequences of which have been an extreme lack of liquidity and high interest and foreign exchange
rates. The crisis has also involved declining prices in shares of stock, tightening of available credit, and
stoppage or postponement of certain construction projects. Foreign exchange rates and prices of shares
of stock are still highly volatile. However, interest rates and inÖation have declined since 1999.
High exchange and interest rates have increased the cost of funds, as well as the amount of debt to
be serviced by the Company, the subsidiary, and the associated companies. The depreciation of the
F-68
Rupiah has also impacted the Ñnancial condition of the KSO Investors. The slowing down of economic
activities has aÅected the growth of the Company's subscribers.
In response to these economic events, the management has adopted more stringent criteria in the
evaluation of investment activities. The management will continue to adopt this measure and will
initiate a cost-cutting program as well as pursuing project developments using the ""turnkey'' system,
hence not all risks incurred are borne by the Company.
Management has also taken proactive measures in resolving the KSO issues and in managing
investments in associated companies eÅectively and selectively by utilizing the services of international
legal and Ñnancial consultants.
Recovery of the economy to a sound and stable condition is dependent on the Ñscal, monetary and
other measures being taken by the Government, actions which are beyond the Company and its
subsidiary's control, to achieve economic recovery. It is not possible to determine the future eÅect the
economic condition may have on the Company and its subsidiary's liquidity and earnings, including
the eÅect Öowing through from their investors, customers and suppliers.
40. RECLASSIFICATION OF ACCOUNTS
To conform with the 2000 consolidated Ñnancial statement presentation, certain accounts in the
1999 consolidated Ñnancial statement are reclassiÑed.
Following is a summary of signiÑcant accounts in the 1999 consolidated Ñnancial statements before
and after the reclassiÑcations:
1999
As Previously
As Restated Reported
Rp Rp
Additional paid-in capital ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,073,333 1,504,055
DiÅerence due to change of equity in associated companiesÏÏÏÏÏÏ 430,722 162,299
Translation adjustment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 162,299 Ì
41. OTHER INFORMATION
On June 20, 2000, the Minister of Manpower of the Republic of Indonesia issued Decree No.
Kep-150/Men/2000 on the Settlement of Work Dismissal and Determination of Separation, Gratuity
and Compensation Payments by Companies. This decree requires companies to pay their employees
termination, gratuity and compensation beneÑts in case of employment separation.
As provided in Note 29, the Company has a deÑned beneÑt pension plan to its employees. To date,
the Company does not have any plan for mass employment terminations in the foreseeable future,
which will signiÑcantly aÅect its Ñnancial position and operational activities.
In relation with this decree, the Company has accrued the estimated cost of annual voluntary
resignation of its employees which was recorded as part of personnel-related expense.
F-69
42. SUBSEQUENT EVENTS

a. From January 1 to February 28, 2001, the Company made an installment payment
amounting to Rp 192,496 million, U.S.$9,127 thousand, FRF 4,618 thousand, and NLG 2,273
thousand on the two-step loans from related party (Note 15).
b. On February 15, 2001, the Company and Indosat signed a Memorandum of Understanding
(""MOU'') relating to a series of transactions concerning their ownership interest in Telkomsel,
Satelindo and Lintasarta. In addition, the Company agreed to sell to Indosat all the Company's
assets used under the KSO Agreement (Regional Division IV) with PT Mitra Global
Telekomunikasi Indonesia (""MGTI'') and will assign such KSO Agreement with MGTI to Indosat
(altogether referred to as ""KSO IV Assets'').
Under the MOU, the following transactions are to occur between the Company and Indosat:
1. The Company will acquire Indosat's 35% interest in Telkomsel for U.S.$945 million.
2. Indosat will acquire the following from the Company:
‚ The Company's 22.5% interest in Satelindo for U.S.$186 million
‚ The Company's 37.66% interest in Lintasarta for U.S.$38 million
‚ The KSO IV Assets for U.S.$375 million
These transactions are subject to certain conditions, including regulatory and corporate approvals.
It is anticipated that both the Company and Indosat will seek shareholder approval by the end of
April 2001.
43. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES

FOLLOWED BY THE COMPANY AND ITS SUBSIDIARY AND U.S. GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES
The consolidated Ñnancial statements have been prepared in accordance with Indonesian GAAP
which diÅer in certain respects from U.S. GAAP.
The signiÑcant diÅerences are reÖected in the approximations provided in Note 44 and arise due to
the items discussed in the following paragraphs:
a. Pension
The Company, for purposes of Indonesian GAAP, uses a method of accounting for pensions that is
substantially consistent with the requirements of U.S. GAAP.
As stated in its pension plan regulations, the Company does not provide regular pension increases.
However, in 1994 and 1998 (eÅective January 1, 1999), the Company made increases in pension
beneÑts for pensioners, which were considered as prior service costs. Based on PSAK No. 24, the prior
service costs attributable to the increases in pension beneÑts for pensioners in 1994 and 1999, were
directly charged to expense in those years. Under SFAS 87, such prior service costs should be deferred
and amortized systematically over the estimated average future working periods of active employees
(14.4 years in 1999 and 15.9 years in 1994).
F-70
b. Revaluation of Property, Plant and Equipment
While Indonesian GAAP do not generally allow companies to recognize increases in the value of
property, plant and equipment that occur subsequent to acquisition, an exception is provided for
revaluation made in accordance with Government regulation. The Company revalued its property,
plant and equipment that were used in operations as of January 1, 1979 and January 1, 1987. Under U.S.
GAAP, property, plant and equipment may not be stated at more than their historical acquisition cost.
c. Stock Issuance Costs
Under Indonesian GAAP, stock issuance costs are deferred and amortized over a certain period of
time. Under U.S. GAAP, the stock issuance costs are oÅset against the proceeds from the stock
issuance.
EÅective 2000, the Capital Market Supervisory Agency (Bapepam) requires that stock issuance
costs be recorded as part of additional paid-in capital.
d. Revenue-Sharing Arrangements
Under Indonesian GAAP, property, plant and equipment built by an investor under revenue-
sharing arrangements are recognized as property, plant and equipment under revenue-sharing arrange-
ments in the books of the party to whom ownership in such properties shall be transferred at the end of
the revenue-sharing period, with a corresponding initial credit to unearned income. The property, plant
and equipment are depreciated over their useful lives, while the unearned income is amortized over the
revenue-sharing period. The Company records its share of the revenues earned on a net basis.
Under U.S. GAAP, the accounting for revenue-sharing arrangements depends on the substance of
the arrangements. When there is no guaranteed investment return to the investors, the accounting
treatment is similar to that under Indonesian GAAP. When there is a guaranteed investment return to
the investors based on a certain rate of return, the assets under revenue-sharing arrangements are
recorded and, an obligation under revenue-sharing arrangements is correspondingly recognized. A
portion of the investor's share in revenue is recorded as interest expense based on such rate of return
and the remaining portion is treated as a reduction of the obligation. Revenues earned are recorded on
a gross basis. This accounting treatment also applies to changes during the revenue-sharing period that
aÅect the characteristics of the commitment.
e. Foreign Exchange DiÅerential on Property under Construction
Under Indonesian GAAP, starting 1997, foreign exchange diÅerential resulting from loans used to
Ñnance property under construction should be capitalized. Capitalization of foreign exchange diÅeren-
tial ceases when the construction is substantially completed and the constructed property is ready for
its intended use. Under U.S. GAAP, foreign exchange diÅerential should be charged to current
operations.
F-71
44. RECONCILIATION OF NET INCOME AND EQUITY DETERMINED UNDER

INDONESIAN AND U.S. GAAP
The following is a summary of the signiÑcant adjustments to net income for the years ended
December 31, 1998, 1999 and 2000 and to equity as of December 31, 1998, 1999 and 2000 which would
be required if U.S. GAAP had been applied, instead of Indonesian GAAP, in the consolidated Ñnancial
statements:
1998 1999 2000
Rp Rp Rp
Net income according to the consolidated statements of
income prepared under Indonesian GAAPÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,168,670 2,172,321 2,539,011
U.S. GAAP adjustments Ì increase (decrease) due to:
Capitalization of foreign exchange diÅerential Ì net of
related depreciation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (319,697) 109,869 (133,666)
Equity in net gain (loss) of associated companies ÏÏÏÏÏÏ (71,748) 74,705 2,389
Pensions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (5,323) 70,531 94,636
Amortization of deferred stock issuance costs ÏÏÏÏÏÏÏÏÏÏ 26,883 26,883 22,402
Revenue-sharing arrangements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,132 11,909 (23,347)
Revaluation of property, plant and equipment ÏÏÏÏÏÏÏÏÏ 4,095 4,095 4,095
Income tax eÅect on U.S. GAAP adjustments ÏÏÏÏÏÏÏÏÏÏ 112,085 (84,986) (8,336)
Net adjustments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (244,573) 213,006 (41,827)
Approximate net income in accordance with U.S. GAAP ÏÏ 924,097 2,385,327 2,497,184
Net income per share Ì in full Rupiah amount ÏÏÏÏÏÏÏÏÏÏ 99.01 247.33 247.74
Net income per ADS (20 B shares per ADS) Ì in full
Rupiah amount ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,980.21 4,946.62 4,954.73
1999 2000
Rp Rp
Equity according to the consolidated balance sheets prepared under
Indonesian GAAP ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12,224,309 13,687,643
U.S. GAAP adjustments Ì increase (decrease) due to:
Pensions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 44,537 139,173
Revaluation of property, plant and equipment:
Increment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (664,974) (664,974)
Accumulated depreciation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 652,855 656,950
Capitalization of foreign exchange diÅerential Ì net of related
depreciation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (507,999) (641,665)
Revenue-sharing arrangements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (361,325) (384,672)
Deferred stock issuance costsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (22,402) Ì
Equity in net income of associated companiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (16,503) (14,114)
Deferred tax liabilities on U.S. GAAP adjustmentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 256,288 247,952
Net adjustments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (619,523) (661,350)
Approximate stockholders' equity in accordance with U.S. GAAP ÏÏ 11,604,786 13,026,293
F-72
With regard to the consolidated balance sheets and consolidated statements of income, the
following signiÑcant captions determined under U.S. GAAP would have been:
1999 2000
Rp Rp
Consolidated balance sheets
Current assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,612,138 9,108,966
Total assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 25,770,630 28,216,417
Current liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,348,566 3,250,456
Total liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,165,844 15,190,124
Consolidated statements of income
Operating incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,276,137 4,353,373
45. ADDITIONAL FINANCIAL STATEMENT DISCLOSURES REQUIRED BY U.S. GAAP

AND THE U.S. SEC
The following information is presented on the basis of U.S. GAAP:
a. Income Tax
The reconciliation between the expected income tax provision in accordance with U.S. GAAP and
the actual provision for income tax recorded in accordance with U.S. GAAP is as follows:
1998 1999 2000
Rp Rp Rp
Approximate income before tax in accordance with U.S.
GAAP ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,067,794 3,260,705 3,424,885
Deduct minority interest in Subsidiary's income before tax Ì (18,680) (21,087)
Income before provision for tax after minority interest ÏÏÏÏ 1,067,794 3,242,025 3,403,798
Expected income tax in accordance with U.S. GAAP at
statutory tax ratesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 320,329 972,599 1,021,131
EÅect of permanent diÅerences at the enacted maximum
tax rate (30%):
Net periodic postretirement beneÑt cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 116,605 49,531
Employee beneÑts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,561 7,850 9,615
Permanent diÅerences of the KSO Units ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,589) 1,848 5,177
Interest income which was already subjected to Ñnal tax (178,639) (206,327) (189,494)
Revenue-sharing arrangements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2,640) (10,723) (10,330)
Deferred stock issuance costs(*)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (8,065) (8,065) (6,721)
Revaluation of property, plant and equipment(*) ÏÏÏÏÏÏ (1,229) (1,229) (1,229)
OtherÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,969 (15,859) 28,935
Subsidiary's provision for income tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 5,334 7,925
Provision for income tax in accordance with U.S. GAAP ÏÏ 143,697 862,033 914,540
(*) The tax eÅects of the stock issuance costs and revaluation of property, plant and equipment are oÅset against stockholders'
equity for U.S. GAAP purposes.
F-73
BeneÑts enjoyed by pensioners fall under the category of beneÑts in kind which are non-
deductible expenses under Indonesian tax laws.
b. Fair Value of Financial Instruments
The following methods and assumptions are used to estimate the fair value of each class of
Ñnancial instruments:
Cash and cash equivalents and temporary investments
The carrying amount approximates fair value because of the short-term nature of the instruments.
Long-term debt Ì related party Ì less current maturities
The fair value of these Ñnancial instruments are estimated on the basis of the discounted value of
future cash Öows expected to be paid, considering rates of interest at which the Company could borrow
as of the respective balance sheet dates.
For purposes of estimating the fair value of the long-term debt, the Company has used the Rupiah
borrowing rates of 26.36% and 14.09%, the average U.S. Dollar borrowing rate of 6.8% and 7.32% and
the respective average borrowing rates for the debt in other currencies, which represent the average
rates for 1999 and 2000, respectively, prior to the onset of the economic diÇculties (Note 39). Under
the current environment, an estimate of the interest rates as of a point in time, given the signiÑcance of
the Company's debt and the general unavailability of funds, is not possible. For one percentage point
increase in the aboveÓmentioned borrowing rates, the fair value of the Company's long-term debt at
December 31, 2000 would decrease by Rp 425,803 million.
The estimated fair values of the Company and its subsidiary's Ñnancial instruments are as follows:
Carrying Amount Fair Value
Rp Rp
1999:
Cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,597,537 3,597,537
Temporary investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,319,535 1,319,535
Long-term debt Ì related party Ì net of current maturities ÏÏÏÏ 7,644,008 5,853,430
2000:
Cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,542,174 3,542,174
Temporary investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,870,990 3,870,990
Long-term debt Ì related party Ì net of current maturities ÏÏÏÏ 8,852,652 7,458,658
The methods and assumptions followed to disclose the fair value are inherently judgmental and
involve various limitations, including the following:
‚ Fair values presented do not take into consideration the eÅect of future currency Öuctuations.
‚ Estimated fair values are not necessarily indicative of the amounts that the Company and its
subsidiary would record upon disposal/termination of the Ñnancial instruments.
F-74
c. Research and Development
Research and development expenditures, as determined under U.S. GAAP, amounted to approxi-
mately Rp 12,347 million, Rp 12,598 million and Rp 33,110 million in 1998, 1999 and 2000, respectively.
d. Valuation and Qualifying Accounts
The following summarizes the activities in the valuation and qualifying accounts:
Balance at Additions
Beginning (Charged to Cost Unrealized Balance at
of Year and Expenses) Loss Deductions End of Year
Rp Rp Rp Rp Rp
1999:
Unrealized loss on decline in market
value of marketable securitiesÏÏÏÏÏÏ 707 Ì 159 707 159
Allowance for doubtful accounts
Related parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 48,437 6,371 Ì 24,349 30,459
Third parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 143,148 125,557 Ì 64,886 203,819
Allowance for inventory obsolescence 13,351 47,252 Ì 8,674 51,929
2000:
Unrealized loss on decline in market
value of marketable securitiesÏÏÏÏÏÏ 159 Ì 6 Ì 165
Allowance for doubtful accounts
Related parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30,459 137,210 Ì 167,669
Third parties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 203,819 76,243 Ì 93,460 186,602
Allowance for inventory obsolescence 51,929 Ì Ì 28,610 23,319
e. Risks and Uncertainties
The preparation of Ñnancial statements in conformity with generally accepted accounting princi-
ples requires management to make estimates and assumptions that aÅect the reported amounts of
assets and liabilities at the date of the Ñnancial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could be diÅerent from these estimates.
f. Derivative Financial Transactions
There are no derivative contracts outstanding as of December 31, 2000.
Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instru-
ments and Hedging Activities, is eÅective for all Ñscal years beginning after June 15, 2000. SFAS 133, as
amended, establishes accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities. Under SFAS 133, certain
contracts that were not formerly considered derivatives may now meet the deÑnition of a derivative.
The Company will adopt SFAS 133 eÅective January 1, 2001. Management does not expect the
F-75
adoption of SFAS 133 to have a signiÑcant impact on the Ñnancial position, results of operations, or
cash Öows of the Company.
g. Comprehensive Income
Comprehensive income Ì net of tax, as determined under U.S. GAAP in 1998, 1999 and 2000
amounted to Rp 1,077,193 million, Rp 2,405,394 million and Rp 2,507,668 million, respectively.
Adjustments to 1999 and 2000 net income to arrive at comprehensive income represent the increase
in investment as a result of foreign currency translation of associated companies, changes of equity in
associated companies and unrealized loss on decline in value of securities.
In 1998, the adjustment represented the increase in investment as a result of the change in
reporting currency to U.S. Dollar of two associated companies.
h. General Price Level Financial Information
Indonesia has experienced a cumulative inÖation rate of approximately 98% for the three years
ended December 31, 2000. As a result, the currency in which the Company and its subsidiary report, the
Indonesian Rupiah, is considered a currency in a hyperinÖationary economy in accordance with U.S.
GAAP.
The Company and its subsidiary's consolidated Ñnancial statements, prepared in accordance with
Indonesian GAAP, do not include any adjustments to consider the eÅects of changing prices.
In accordance with regulations of the United States Securities and Exchange Commission, the
following supplemental Ñnancial information is provided to approximate the eÅects of changing prices
upon the Company and its subsidiary's Ñnancial position and results of operations. In presenting the
following information, the Company and its subsidiary's are utilizing the historical cost/constant
currency methodology and are applying it to the consolidated Ñnancial statements prepared in
accordance with Indonesian GAAP, eliminating the eÅects of the revaluation of property, plant and
equipment in 1979 and 1987. In presenting comparative amounts for 1999, the restated Ñnancial
information has been adjusted to present such information in terms of the measuring unit at
December 31, 2000.
1999 2000
Rp Rp
Current monetary assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,644,488 8,873,920
Inventories and other current assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 591,761 245,221
Total current assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,236,249 9,119,141
Property, plant and equipment and other assetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 42,257,563 39,824,424
Total Assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 49,493,812 48,943,565
F-76
1999 2000
Rp Rp
Current monetary liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,564,526 3,224,463
Other current liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 147,205 172,640
Total current liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,711,731 3,397,103
Long-term debt and other noncurrent liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,163,703 14,231,118
Minority interest in net assets of subsidiaryÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 33,140 39,999
Equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 31,585,238 31,275,345
Total Liabilities and Equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 49,493,812 48,943,565
Operating revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,871,776 10,023,827
Operating expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2,817,976) (3,460,729)
Depreciation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4,206,718) (4,490,988)
Other income (expense)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (310,387) (715,255)
Tax expenseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (858,156) (946,677)
Gain on net monetary liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 132,176 437,442
Minority interest in net income of subsidiary ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (14,738) (13,749)
Net Income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 795,977 833,871
F-77
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, as amended, the
Registrant hereby certiÑes that it meets all of the requirements for Ñling on Form 20-F and that it has
duly caused this annual report to be signed on its behalf by the undersigned, there unto duly
authorized, in Jakarta, on the 19th day of March, 2001.
PERUSAHAAN PERSEROAN (PERSERO) P.T.

TELEKOMUNIKASI INDONESIA Tbk.
By:
MUHAMMAD NAZIF
President Director
MESSAGE FROM THE CHAIRMAN OF THE BOARD
Indonesia's telecommunications industry has been undergoing a signiÑcant transformation since
the promulgation of Telecommunication Law No. 36/1999 in September 1999 which comes into eÅect
on September 8, 2000. The law has marked the end of telecommunications monopoly in Indonesia, and
has exposed TELKOM full competition in its business engagement. This may constitute pressures as
well as challenges to the Company in grasping opportunities to improve its performance in all aspects. I
believe, however, that as incumbent operator with long standing stature, TELKOM has been well
prepared for the new circumstances and is poised to take advantages of the new competitive
environment.
Amidst the changing telecommunication business environment and the impact of monetary crisis
engulÑng Indonesia since mid 1997, TELKOM recorded a successful performance in the year 2000. The
performance, which is presented in detail in this report, reÖects a positive continuous growth during
the last Ñve years with a compound annual growth rate in operating revenues and operating income of
16,6 per cent and 17.1 per cent respectively.
However, in the year 2000, TELKOM has been facing a number of problems to be resolved such as
KSO (joint operation scheme) commitment, cross shareholding and joint shareholdings in several
associated companies. Nevertheless, being a company with convincing fundamental infrastructure,
competent employees, and long standing experiences, TELKOM will be capable to compete and
become the winner through proper setting of its business strategy, including allocation and utilization
of its resources.
As TELKOM faces full competitive environment in all business lines and in order to cope with
increasing pressures and totally diÅerent nature of competition from the past, the Company has to
improve its competence to fulÑll market requirements, by implementing competence-based human
resources management, as well as creating new business opportunities.
The new vision provides the Company with crystal clear direction for improvement through the
establishment of strategic platforms and strategic policies, which eventually lead to increasing company
value in all aspects.
After all, I would like to express my gratitude for the support extended by the shareholders, the
management team, employees, customers, partners and others, who have unceasingly encouraged
TELKOM to achieve its performance targets in 2000. We are conÑdent that with God's blessing we will
be able to achieve more in the future.
Bandung, 19 March 2001
BACELIUS RURU
Chairman of the Board
MESSAGE FROM THE PRESIDENT DIRECTOR TO SHAREHOLDERS
Dear Shareholders,
The year 2000 was Öourished by the change in regulatory aspect suggesting that the industry will
see dynamic changes where only the most competitive, Öexible and eÇcient company can adapt and
survive. TELKOM is fortunate to have experiences of operating in the demanding and burgeoning
telecommunications services and network providers. This will stand us in good stead as we prepare for
even more intense market competition in Indonesia.
Although Ñxed-line and related plain ordinary telephone services currently remain the core of
TELKOM's business, yet we are aware, that transformation of telecommunication industry will enter
into the convergent process of the formerly separated information service and communication service.
TELKOM is currently entering into InfoCom business.
In terms of internal initiatives, the year 2000 has been noticed as a year of consolidated eÅort in
preparing the business foundations for pre-empting the competition and grasping opportunities ahead,
by redeÑning strategies related to business areas, human resource management, business excellence,
capital expenditures, good corporate governance, and good corporate citizenship.
Although the domestic macro-economic condition was still similar to the previous year as the
continuing impact of the monetary crisis, TELKOM has successfully passed the year 2000 with a good
Ñnancial outcome as reÖected in the balance sheets and statement of income of the year 2000. This
achievement was the result of serious eÅorts and committed attitude to sustain the Company's growth
combined with potential support from the customers.
TELKOM's net income for the year 2000 was Rp 2,539.0 billion, up by 16.9 per cent, and earning
before interest, tax, depreciation and amortization (EBITDA) was Rp 6,125.1 billion or an increase by
15.4 per cent compared to the previous year.
Operating revenues increased by 20.4 per cent to Rp 9,375.7 billion, reÖecting a continuing demand
for TELKOM's services and improved levels of customer service, despite increasing foreign exchange
pressures on our margins. In addition the growth of operating expenses could be reduced below the
growth of operating revenues. However, the depreciation of Rupiah as well as the increase in interest
expense has negatively signiÑcantly impacted the Company net income.
It is noticed that the increase in revenue was achieved in an environment of unresolved KSO's
resolution, business restructuring, and the issue of earlier termination of exclusivity right.
We also report that the Company could maintain its position as one of the major contributors to
the Government with total contribution of Rp 1,454 million, which includes dividend for Ñscal year
1999, taxes and liabilities.
On the other hand, during 2000 TELKOM shares price at the stock exchange both domestic and
overseas suÅered a gradual decline along with the decline of the Jakarta Composite Index. As a matter
of fact, major investors considered the country risk has been mounting as riots and unrests are recurring
in the country, resulting in the security, socio-economic and political instability, which by all means
posed a signiÑcant eÅect to the investment decision during the year 2000.
Our response to the challenges was reÖected in the setting of strategic policies through the
establishment of seven business projects in 2000 covering Enterprise Business, Mobile Communica-
tions, Cable TV, Calling Card and Pay-phone, Intelligent Network, Voice over Internet Protocol, and
Business to Business.
We believe our strategic platforms will match the dynamics of a more competitive market. As the
Company simultaneously continues with the transformation of corporate culture, we wish to become a
highly competitive and leading company applying state-of-the-art technology as well as user friendly,
which is always adaptive to customer and community needs as a part of the overall eÅorts to
consistently build up the Company value.
Bandung, 19 March 2001
MUHAMMAD NAZIF
President Director and CEO
ÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌ
PT TELEKOMUNIKASI INDONESIA Tbk.
(""PT TELKOM'')
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS 2001
NOTICE IS HEREBY GIVEN that the Extraordinary General Meeting of Shareholders (""EGMS'') and Annual
General Meeting of Shareholders (""AGMS'') 2001 of Perusahaan Perseroan (Persero) PT Telekomunikasi
Indonesia Tbk (""PT TELKOM'' or the ""Company'') will be held on May 10th, 2001 at 09:00 a.m. Jakarta Time, at
Aula Pangeran Kuningan Room, Gedung Grha Citra Caraka, 1st Floor, Jl. Jend. Gatot Subroto No. 52,
Jakarta 12710 Ì Indonesia, to consider if thought Ñt, to pass the following resolutions of the Company:
EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

1. Approval relating to the transactions with Perusahaan Perseroan (Persero) PT Indonesian Satellite Corporation
Tbk. (""Indosat''), involving a material transaction and conÖict of interests:
a. Acquisition by TELKOM of 35.0% of the issued and fully paid shares of PT Telekomunikasi Selular by owned
by Indosat;
b. Sale by TELKOM of 22.5% of the issued and fully paid shares of PT Satelit Palapa Indonesia to Indosat;
c. Sale by TELKOM of 37,66% of the issued and fully paid shares of PT Aplikanusa Lintasarta, and all
outstanding convertible bonds (or shares issued upon from the conversion hereof) of PT Aplikanusa
Lintasarta held by TELKOM at their principal amount plus unpaid accrued interest, to Indosat; and
d. Acquisition by Indosat of all of TELKOM's rights, and transfer or novation of all of TELKOM's obligations,
under a joint operating agreement with PT Mitra Global Telekomunikasi Indonesia, together with all of
TELKOM's assets which TELKOM is required to make available for use by the joint operating scheme created
by the joint operating agreement;
2. Approval relating to the acquisition by TELKOM of 90.32% of the issued and fully paid shares of PT Daya Mitra
Telekomunikasi owned by PT Intidaya Sistelindomitra, Cable & Wireless plc and PT Mitracipta Sarananusa,
and the guarantee of certain debt obligations of PT Daya Mitra Telekomunikasi owed to Cable & Wireless plc,
by TELKOM, involving a material transaction.
Detach here
ANNUAL GENERAL MEETING OF SHAREHOLDERS

1. Approval of the Company's Annual Report for the Ñnancial year 2000.
2. RatiÑcation of the Company audited consolidated Ñnancial statements for the Ñnancial year 2000 and acquittal
and discharge to the Board of Directors and Board of Commissioners.
3. Determination of the Ñnancial year 2000's proÑt utilization including distribution of dividend.
4. Appointment of Public Accountant to audit the Company records for 2001 Ñnancial year.
5. Approval of the change of the Company's Articles of Association with regard to (i) scope of Business in line
with the InfoCom Business; (ii) value of Material Transactions; (iii) adjustment of the duty and authority of the
Company's Board of Directors and Commissioners; and (iv) include terms regarding Independent
Commissioner.
6. Appointment of the Board of Commissioners for 2001 Ó 2004 along with the delegation of duty and authority.
7. Approval relating to the company's reorganization and business reconstruction principal.
8. Determination of the compensation for the Board of Directors and the Board of Commissioners in 2001 Ñnancial
year.
Those eligible to attend the EGMS and AGMS shall be shareholders of the Company whose names are
registered at the Company's ADS at 16:00 p.m. New York time on April 13th, 2001.
By Order of the Board of Directors
MUHAMMAD NAZIF
President Director
앻
April, 2000
(This page intentionally left blank)
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Annual Report Telkom Indonesia 2000

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2000 Annual Report

Perusahaan Perseroan (Persero)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Name of each exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Series A Shares, par value 500 Rupiah per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1

* Investor Relations Unit

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS* ÏÏÏÏÏÏÏÏ 5

Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 70

Item 17. FINANCIAL STATEMENTS* ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 70

* Omitted because item is not applicable.

(1) Source: Bank Indonesia.

Forward Looking Statement

Item 1: Identity of Directors, Senior Management and Advisers

Item 2: OÅer Statistics and Expected Timetable

Item 3: Key Information

A. Selected Ñnancial data

C. Reason for the oÅer and use of proceeds

Exchange Rate Risk

Long Term solutions of KSO Agreements

Item 4: Information on the Company

Capital Expenditure Plan 2001

Development of Phone Business

Development of Mobile Business

Development of View/Cable TV Business

Development of Internet/Multimedia Business

TELKOM plans to spend Rp 129.64 billion on internet/multimedia business development which

Development of Business Service

Supporting FacilitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 151.04

Installed lines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,808,849 6,523,724 7,197,099 7,429,262 7,668,077

(1) Figures indicated exclude public phone.

Joint Operation Scheme Services (KSO)

Other Telecommunication Services

Optical Ñbre cable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 174,300 54,44

Partnership Arrangements and Joint Ventures

Minimum new line

KSO's Principal Financial Terms

Employees and Management of the KSO

Asset Disposition at End of KSO Period

1. PT Alcatel Indonesia Cable TV

The Indonesian telecommunications industry is evolving from the traditional telecommunications

Operator The Government through Regional-owned Enterprises, state-

(1) Referred to in the Repelita as line penetration.

Lines in serviceÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,186,030 4,982,466 5,571,644 6,080,193 6,662,605 12.3

(1) Source: Indonesian Central Bureau of Statistics.

LISÏÏÏÏÏÏÏÏÏ 897,323 2,412,221 639,913 579,647 1,198,142 302,948 632,411 6,662,605

LISÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,672,351 668,220 182,073 371,653 213,135 172,445 3,279,877

TariÅ for Providing Telecommunication Service

Mobile Cellular TariÅ

Other Services TariÅ

TariÅ for Providing Telecommunication Network

Cellular and Fixed Line Interconnection.

Fixed Wireline Interconnection.

Access Charge ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Rp 850/call

Leased line tariÅ

Universal Service Obligation

Relationship with the Government

Director of Director of Director of Finance Director of

Development Research on Regional Network Multimedia Atelier Training Property Information

D. Property, plant and equipment

Item 5: Operating and Financial Review and Prospects

Revenues from Other Telecommunications Services

Operations, Maintenance and Telecommunications Services

General and Administrative